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Public  Service  Commission  for  tbe  First 

District 


TO 


New  York  Municipal  Railway  Corporation 


f 


JAMAICA  LINE 
LIBERTY  AVENUE  LINE 


CERTIFICATE 

MARCH  19,  1913 


L1304— 4M— M.  '13  (P) 


-71  t/ 


Public  Service  Commission  for  the  First 

District 


TO 


New  York  Municipal  Railway  Corporation 


JAMAICA   LINE 
LIBERTY  AVENUE  LINE 


CERTIFICATE 


MARCH    19,    1913 


[NOTE:     Running  head  lines  and  marginal  notes  do  not  form  part  of  the 
original  certificate.] 


THE  J.  W.  PRATT  COMPANY 

PRINTERS 
52-58  Duane  Street,  New  York 


TABLE  OF  CONTENTS 


PAOB 

Definitions 1 

Description  of  Existing  Railroads 2 

Recitals 3 

Authorization 4 

Description  of  New  Routes 4 

I.     Execution  and  Acceptance  of  Certificate 6 

II.     Securing  of  Consents 6 

III.  Construction .  7 

IV.  Plans  and  Profiles,  etc 8 

V.     Real  Estate,  Damages,  Maintenance  of  Streets,  Surface  and  Sub- 
surface Structures,  etc 11 

VI.     Fares 11 

VII.     Operation,  Maintenance,  Uses  of  Plant  and  Property,  etc 11 

VIII.     Supervision  of  Construction,  Maintenance  and  Operation 12 

IX.     Actual  Cost 16 

X.     Rental 22 

XL     Termination. 35 

XII.     Payments  upon  Expiration 40 

XIII.  Arbitration 42 

XIV.  Transfer  of  Rights  Granted  by  Assignment  or  otherwise 43 

XV.     Proviso  based  upon  Operating  Contract  and  Certificate  for  Addi- 
tional Tracks 44 

Acknowledgments 47 

Acceptance 48 


RKORfrl 


PUBLIC  SERVICE  COMMISSION  FOR  THE  FIRST 
DISTRICT 


TO 


NEW    YORK    MUNICIPAL    RAILWAY    CORPORATION 


CERTIFICATE 
MARCH    19,    1913 


THE  PUBLIC  SERVICE  COMMISSION  FOR  THE  FIRST  DISTRICT   Commission 
does  hereby  certify  as  follows : 

The  word  "CITY"  as  used  herein  means  The  City  of  New    "City" 
York,  and  any  other  corporation  or  division  of  government  to 
which  the  ownership,  rights,  powers  and  privileges  of  The  City 
of  New  York  under  the  Rapid  Transit  Act  shall  hereafter  come, 
belong  or  appertain. 

The  words  "NEW  YORK"  as  used  herein  mean  the  City  of    "New  York" 
New  York  according  to  its  boundaries  as  now  or  hereafter  fixed. 

The  word  "COMMISSION"  to  mean  the  Public  Service  Com-  "Commission1 
mission  for  the  First  District  in  so  far  as  it  acts  herein  as  the 
agent  of  the  City,  and  any  other  board,  body,  official  or  officials, 
to  which  or  to  whom  the  powers  belonging  to  the  Commission 
under  the  Rapid  Transit  Act  shall,  by  virtue  of  any  act  or  acts, 
hereafter  pass  or  be  held  to  appertain. 

The  words  "SUBWAY  COMPANY"  as  used  herein  mean  the   "Subway 
New  York  Municipal  Railway  Corporation,  its  successors,  assigns,    ComPany" 
lessee,  transferee,  or  any  corporation  which  may  hereafter  suc- 
ceed by  consolidation  or  merger  to  the  rights  of  the  said  New 
York  Municipal  Railway  Corporation. 

The  word  "RAILROADS"  as  used  herein  means  the  two  rail-   -Railroads" 
roads  herein  authorized  which  are  referred  to  as  the  JAMAICA 
LINE  and  the  LIBERTY  AVENUE  LINE. 

The  words  "RAPID  TRANSIT  ACT"  as  used  herein  mean  Chap-   "Rapid 
ter  4  of  the  Laws  of  1891  as  heretofore  amended.  Transit  Act- 


1 


RECITALS 


"Board  of 


The  words  "BOARD  OF  ESTIMATE"  as  used  herein  mean  the 
Board  of  Estimate  and  Apportionment  of  The  City  of  New 
York  and  any  other  board  or  officer  to  whom  or  to  which  its 
powers  now  existing  under  the  Rapid  Transit  Act  may  hereafter 
be  transferred  by  law. 


"Comptroller"  ^fa  worc[  ''COMPTROLLER"  as  used  herein  means  the  Comp- 
troller of  The  City  of  New  York  and  the  officer  or  board  to 
whom  or  to  which  his  powers  now  existing  under  the  Rapid  Tran- 
sit Act  may  hereafter  be  transferred  by  law. 

•Engineer"      '•  '...The.  woril:*i6Nt;iNEER"  to  mean  the  Chief  Engineer  of  the 

^  .  Conjmi^sioH  :^nd  .any"  'successor  or  successors  duly  appointed  or, 

•  •'••Hl'-the  Went-  ©•£  n*is  'absence  or  disability,  any  deputy  or  substi- 

tute for  him  or  them  who  shall  be  appointed  Acting  Chief  En- 

gineer by  the  Commission  or  by  its  authority. 

WHEREAS,  the  Subway  Company  is  a  railroad  corporation 
existing  under  the  laws  of  the  State  of  New  York  having  its 
principal  office  at  No.  85  Clinton  Street,  in  the  Borough  of 
Brooklyn,  City  of  New  York,  having  the  right  and  being  under 
obligation  by  contract  to  operate  a  railroad  in  the  Borough  of 
Brooklyn  wholly  within  the  limits  of  New  York  upon  the  follow- 
ing routes  and  hereinafter  referred  to  as  the  "existing  rail- 
roads" : 


Existing  right 
to  operate 


"Existing 
railroads" 


Fulton  Street 
Line 


Broadway  Line  An  elevated  railroad  beginning  at  the  foot  of  Broadway,  East 
River,  at  the  Broadway  Ferry ;  thence  on  Broadway  to  East  New 
York ;  thence  on  Fulton  Street  to  Crescent  Street  and  thence  on 
Crescent  Street  to  Jamaica  Avenue. 

An  elevated  railroad  beginning  at  the  foot  of  Fulton  Street, 
East  River;  running  thence  upon  Fulton  Street  to  East  New 
York;  thence  on  Williams  Place  and  Snediker  Avenue  to  Pit- 
kin  Avenue;  thence  on  Pitkin  Avenue  to  Euclid  Avenue;  thence 
on  Euclid  Avenue  to  Liberty  Avenue  and  thence  on  Liberty 
Avenue  to  the  borough  line  between  the  Borough  of  Queens 
and  the  Borough  of  Brooklyn. 

An  elevated  railroad  beginning  at  the  Brooklyn  terminal  of 
the  Brooklyn  Bridge;  running  thence  on  Sands  Street  and 
High  Street  to  Adams  Street;  thence  on  Adams  Street  to 
Myrtle  Avenue;  thence  on  Myrtle  Avenue  to  Wyckoff  Avenue. 

An  elevated  railroad  beginning  at  Grand  Avenue  and  Myrtle 
Avenue ;  running  thence  on  Grand  Avenue  to  Lexington  Avenue 
and  thence  on  Lexington  Avenue  to  Broadway. 


Myrtle  Avenue 
Line 


Lexington 
Avenue  Line 


RECITALS 

An  elevated  railroad  beginning  at  Hudson  Avenue  and  Fifth  Avenue 
Myrtle  Avenue ;  thence  on  Hudson  Avenue  to  Flatbush  Avenue ; 
thence  on  Flatbush  Avenue  to  Fifth  Avenue;  thence  on  Fifth 
Avenue  to  Thirty-eighth  Street;  thence  on  Thirty-eighth  Street 
to  Third  Avenue;  thence  on  Third  Avenue  to  Sixty-seventh 
Street. 

A  railroad  beginning  at  Franklin  Avenue  and  Fulton  Street;  Brighton 
running   thence    substantially    parallel    to    Franklin    Avenue    to   l 
Flatbush  Avenue;  thence  continuing  in  a  southerly  direction  to 
Church  Avenue  between  East  15th  and  East  16th  Street;  continu- 
ing thence  southerly  between  East   15th   Street  and   East   16th 
Street    to    Sheepshead    Bay;    continuing    thence    southerly    to 
Brighton  Beach  and  from  Brighton  Beach  thence  in  a  westerly 
direction  to  a  point  in  Coney  Island  west  of  West  Fifth  Street. 

A   railroad   beginning  at   a   point   near   Pitkin   Avenue   and   Canarsie  Line 
Snediker   Avenue;    running   thence    southerly    to    the    Canarsie 
Shore. 

A    railroad   beginning   at   a   point   in    Fourth   Avenue    near   Sea  Beach  Line 
Sixty- fourth    Street;    running    thence    easterly    between    Sixty- 
fifth  and  Sixtieth  Streets  to  New  Utrecht  Avenue;  continuing 
thence  easterly  and   southeasterly   to   a  point   in   Coney   Island 
near  Surf  Avenue,  and 

WHEREAS,  such  Subway  Company  is  a  corporation  organized   Subway  Com- 
under  the  Railroad  Law   for  purposes  specified  in  Subdivision   ^^  fnbt°u^ 
9  of  Section  27  of  the  Rapid  Transit  Act  and  is  to  enter  into   tract  with  City 
a  contract  with  the  City  (hereinafter  referred  to  as  the  "subway 
contract"),  to  be  delivered  contemporaneously  with  this  certifi- 
cate,  wherein   and   whereby   said   Subway   Company   agrees   to 
equip,  maintain  and  operate  certain  rapid  transit  railroads  owned 
by  the  City  (hereinafter  referred  to  as  the  "Subway  Railroads") 
in  conjunction  with  said  existing  railroads  and  certain  additional   Additional 
tracks   thereto    in   said   contract   specified,    wholly   within   New 
York,  on  the  basis  of  a  division  of  income,  earnings  or  profits 
as  in  said'  contract  provided ;  and 

WHEREAS,  the  Subway  Company,  as  the  corporation  having  Application 
the  right  and  being  under  obligation  by  contract  to  operate  the 
railroads  hereinbefore  described,  under  the  provisions  of  Section 
24  of  the  Rapid  Transit  Act  has  applied  to  the  Commission  for 
authority  to  extend  its  lines  (meaning- thereby  the  railroads  here- 
inbefore described)  within  New  York  and  to  acquire  terminal 
or  other  facilities,  all  as  hereinafter  described;  and 


AUTHORIZATIONS 


Public  interests 


Routes,    loca- 
tions, plan  of 
construction, 
compensation, 
etc. 


Approvals  and 
consents 


Authorization 


Jamaica  Line 


Liberty  . 
Avenue  Line 


Authorization 


Railroads 


WHEREAS,  since  in  the  judgment  of  the  Commission  the  pub- 
lic interests  so  demand,  the  Commission  has  fixed  and  determined 
the  route  or  routes  by  which  the  Subway  Company  may  extend 
its  railroad  and  has  fixed  and  determined  the  location  and  plan  of 
construction  of  the  Railroads  upon  such  route  or  routes  and  of 
such  tracks  and  facilities,  the  times  within  which  they  shall  be 
respectively  constructed,  the  compensation  to  be  made  therefor 
to  the  City  by  the  Subway  Company,  and  such  other  terms, 
conditions  and  requirements  as  to  the  Commission  appear  just  and 
proper;  and 

WHEREAS,  this  certificate  has  been  approved  by  the  Board  of 
Estimate  and  the  construction  and  operation  of  the  Railroads 
hereby  authorized  have  been  consented  to  by  the  Board  of 
Estimate  and  by  the  Mayor  of  the  City. 

Now  THEREFORE,  the  Commission  has  authorized  and  does 
hereby  authorize,  but  subject  to  the  terms,  conditions  and  re- 
quirements hereinafter  set  forth,  the  Subway  Company  — 

a  To  construct,  maintain  and  operate  a  three  track  railroad 
(which  railroad  is  hereinafter  referred  to  as  the  JAMAICA  LINE) 
upon  the  following  route  or  routes  : 

COMMENCING  at  a  point  in  Jamaica  Avenue  in  the  Bor- 
ough of  Brooklyn  near  Crescent  Street  where  a  connection 
can  conveniently  be  made  with  the  Broadway  Line  of  the 
New  York  Consolidated  Railroad  Company;  running  thence 
upon,  over  and  along  Jamaica  Avenue  to  Grand  Street  in 
the  Village  of  Jamaica. 

b  To  construct,  maintain  and  operate  a  three  track  railroad 
(which  railroad  is  hereinafter  referred  to  as  the  LIBERTY  AVE- 
NUE LINE)  upon  the  following  route  or  routes  : 

COMMENCING  at  a  point  in  Liberty  Avenue  at  the  divid- 
ing line  between,  the  Boroughs  of  Brooklyn  and.  Queens 
where  a  connection  can  be  conveniently  made  with  the  Fulton 
Street  Line  of  the  New  York  Consolidated  Railroad  Com- 
pany; running  thence  easterly  upon,  over  and  along  Liberty 
Avenue  in  the  Borough  of  Queens  to  Lefferts  Avenue. 

2.  To  construct,  maintain  and  operate  within  the  streets, 
avenues  and  public  places  included  within  the  aforesaid  routes 
or  within  the  adjacent  lines  of  intersecting  streets  and  avenues 
lying  within  seventy-five  (75)  feet  of  the  exterior  line  or  side 


AUTHORIZATIONS 

of  the  longitudinal  streets,  avenues  and  public  places  of  the 
route,  all  necessary  and  proper  connections  with  terminal  yards, 
stations,  landing  places,  stairways,  platforms,  elevators,  escalators, 
telegraph,  telephone  and  signal  devices  and  other  appliances  and 
facilities,  all  as  may  be  either  necessary  or  convenient  for  the 
construction,  operation  and  maintenance  of  the  Railroads. 

3.  To  acquire  and  use  private  property  for  the  construction,   to  acquire  real 
maintenance   and   operation   of   the    Railroads   including    yards,   estate 
stations,  station  extensions,  terminal  rooms,  power  plants,  stair- 
ways, elevators,  escalator^,  or  other  methods  of  access  to  and 

from  the  street,  and  for  other  purposes  necessary  or  convenient 
to  carry  into  execution  the  terms  and  authority  of  this  grant. 

4.  To   transport  upon   the   Railroads   persons   and  property,  to  transport 
and   to   use   therefor   and   in   connection    therewith    all   suitable 
appliances. 

5.  To    construct,    maintain    and    operate    under   and    along  to  construct 
streets,  avenues,  highways  and  public  places,  and  upon,  under  or  J^l^aSSi 
contiguous  to  the  Railroads  and  the  existing  railroads   for  the  etc. 
transmission  of  power,  heat  and  light  for  the  use  of  the  Railroads 

and  such  other  railroads  as  may  be  owned  or  controlled  by  the 
Subway  Company  (and  for  no  other  purposes),  telegraph  and 
telephone  wires  and  wires,  cables,  contact  rails,  conduits  and 
ways  and  other  appurtenances;  provided,  however,  that,  except 
for  the  purpose  of  making  necessary  connections,  all  such  appur- 
tenances, when  not  placed  upon  the  structure,  shall  be  placed 
underground,  unless  otherwise  directed  by  the  Commission. 

The  authorizations  or  licenses  hereby  granted  to  construct,   For  85  years 
maintain  and  operate  the  Jamaica  Line  and  the  Liberty  Avenue  ^^  to 
Line,   shall  be  held  by  the   Subway  Company   for  a  period  of  termination 
eighty-five    (85)    years    from   the   date    on    which   the    Subway 
Company   shall  first  begin  operation  of  any  part   of  either  of 
the  Railroads,  unless  sooner  terminated  as  hereinafter  provided. 
Said  date  shall  be  evidenced  by  a  resolution  of  the  Commission   Dates  of  be-in- 
entered  in  its  minutes  approving  such  date  as  the  date  of  begin-  ning  operation 
ning  operation  of  the  Railroads  and  as  the  date  from  which  the 
terms  of  these  authorizations  or  licenses  run  and  from  which 
compensation  payable  hereunder  accrues,  and  also  the  date  from 
which  the  period  of  ten  years  begins  to  run,  after  which  the 
City  may  terminate  the  authorizations  or  licenses  hereby  granted ; 
provided,  however,  that  if  operation  of  either  of  the  Railroads 
be  first  begun  as  to  any  part  thereof  at  a  later  date,  such  date 


ACCEPTANCES,  CONSENTS,  ETC. 

may  be  evidenced  by  a  resolution  of  the  Commission  entered  in  its 
minutes  approving  that  date  as  the  date  of  beginning  operation  of 
such  railroad  and  as  the  date  from  which  the  period  of  ten  years 
begins  to  run,  after  which  the  City  may  separately  terminate  this 
authorization  or  license  therefor. 


Proviso  as  to 


Provided,  however,  and  it  is  expressly  agreed  that  the  authori- 
terms,  condi-    zatjons  Or  licenses  hereby  granted  are  subject  to  certain  terms, 

tions  and  ••'•••  s~*  •      • 

conditions  and  requirements  which  appear  to  the  Commission 
to  be  just  and  proper,  and  which  as  so  subject,  are  prescribed  in 
the  following  articles,  to  wit : 


requirements 


Execution  of  7^5  certificate  will  be  executed  by  the  Commission  in  five 

identical  originals,  so  proved  as  to  be  entitled  to  be  recorded  in 
the  office  of  the  Register  of  the  County  of  Kings  and  the  Clerk 
of  the  County  of  Queens,  and  to  be  filed  in  the  office  of  the 
Secretary  of  State  of  the  State  of  New  York,  all  of  which  will 
be  delivered  by  the  Commission  to  the  president,  vice-president, 

TO  be  accepted  secretary  or  treasurer  of  the  Subway  Company.  The  authoriza- 
m  30  days  t'ons  or  iicenses  hereby  granted  shall  be  inoperative  and  this 
certificate  shall  be  void  unless  within  thirty  days  after  such  de- 
livery or  such  further  period  as  shall  be  prescribed  in  writing 
by  the  Commission,  the  Subway  Company  shall  have  procured 
four  of  the  said  identical  originals  to  be  returned  to  the  Com- 
mission, each  of  them  having  an  acceptance  of  this  certificate 
and  all  the  terms,  conditions  and  requirements  thereof  subscribed 
at  the  foot  thereof  by  the  Subway  Company,  such  acceptance 
being  so  proved  as  to  entitle  it  to  be  recorded  and  filed  as  afore- 
said. 

II 


To  obtain 
property 
owners'   con- 
sents   within 
one  year 


The  authorizations  or  licenses  hereby  granted,  if  the  Com- 
mission shall  so  determine,  after  due  hearing,  shall  (except  as 
in  this  paragraph  otherwise  provided)  become  void  unless  within 
one  year  from  the  time  of  the  acceptance  of  this  certificate  by  the 
Subway  Company  that  Company  shall  further  and  in  due  and 
lawful  form  obtain  and  submit  to  inspection  by  the  Commission 
the  consents  of  the  owners  of  one-half  in  value  of  the  property 
bounded  on  each  portion  of  the  streets,  avenues,  or  highways, 
upon,  under  or  over  which  the  Railroads  or  any  part  thereof 
are  authorized,  to  the  construction  and  operation  of  the  Rail- 


6 


CONSENTS  AND  CONSTRUCTION 

roads  or  such  part  thereof,  or  in  case  the  consent  of  such  prop-  or 

.  .  tion  of  Com- 

erty  owners  cannot  be  obtained,  then  the  determination  pursuant 


missioners 


to  law  of  commissioners  to  be  appointed  by  the  Appellate  Division 
of  the  Supreme  Court  in  the  proper  department  that  such  portion 
of  the  Railroads  ought  to  be  constructed  and  operated,  the  said 
determination   of   such    commissioners   when   confirmed   by   the 
Court,  to  be  taken  in  lieu  of  such  consent  of  property  owners. 
Provided,  however,  and  it  is  expressly  stipulated,  that  the  Com-   Commission 
mission  shall  have  power,  upon  reasonable  cause  shown,  to  ex-   ™m^  ex 
tend  by  written  certificate  either,  of  the  periods  hereinbefore  in 
this  article  prescribed;  and  provided  further  that  if  such  con- 
sents shall  have  been  given  as  to  either,  but  not  as  to  both,  of  the 
Railroads,   the   authorizations  or   licenses   hereby   granted   shall 
nevertheless  continue  in  force  as  to  such  one  of  the  Railroads     • 
for  which  such  consents  shall  have  been  given. 

The  Subway  Company  covenants  that  it  will  be  diligent  in   Subway  Com- 


prosecuting   applications   for   the   consents   aforesaid,   but   if   it  1 


shall  not  have  secured  the  same  within  the  period  of  one  year 
after  its  acceptance  as  aforesaid  of  this  certificate,  then  and  in 
such  case  the  Subway  Company  shall,  after  a  written  notice  of 
three  months  to  the  Commission,  be  released  from  its  obligations  May  be 
hereunder  as  to  such  one  of  the  Railroads  for  which  such  con- 
sents .shall  not  have  been  given,  unless  within  such  three  months, 
or  within  such  further  period  to  be  prescribed  by  the  Commis- 
sion, such  consents  shall  have  been  given. 

Ill 

The  Subway  Company  shall  begin  the  construction  of  each   when  con- 
of  the  Railroads  (except  the  third  track)  within  six  (6)  months   struction  to 
after  it  shall  have  obtained  the  consents  therefor,  as  aforesaid, 
and  within  two  (2)  years  thereafter  shall  complete  the  construc- 
tion of  the  same  and  begin  the  operation  thereof. 

In  case  the  Subway  Company,  within  the  said  period  of  six    in  case  of 


(6)  months  after  it  shall  have  obtained  the  consents  necessary   failure 

.  or  complete 

as  aforesaid,  shall  not  have  begun  the  actual  construction  of 
each  of  the  Railroads,  or  if,  after  having  begun,  it  shall  suspend 
the  same  prior  to  the  completion  thereof  for  a  period  exceeding 
three  (3)  months,  or  if  it  shall  not  complete  such  construction 
and  begin  the  operation  of  each  of  the  Railroads  within  the  said 
period  of  two  (2)  years,  then  and  in  either  of  such  cases  the 
authorizations  or  licenses  hereby  granted,  or  any  part  thereof, 
may  be  forfeited. 


3  CONSTRUCTION   OF  THE  RAILROADS 

Commission  The  Commission,  nevertheless,   shall  have  the  power,   upon 

reasonable   cause   shown,   to   extend   by    resolution   any   of    the 

time  •  J 

periods  in  this  article  prescribed.  Additional  time  shall  be  al- 
lowed by  way  of  extension  of  any  period  of  such  commence- 
ment of  construction,  or  for  the  completion  thereof,  or  for  the 
commencement  of  operation  of  either  of  the  Railroads,  equal  to 
the  total  period  of  delay  caused  by  strikes,  injunction  or  by  neces- 
I  sary  proceedings  for  condemnation  of  real  estate,  easements  or 
other  property,  or  by  other  causes  beyond  the  control  of  the 
Subway  Company,  so  far  as  such  strikes,  injunctions  or  pro- 
ceedings, or  such  other  causes,  shall  necessarily  prevent  the 
Subway  Company  from  prosecuting  such  construction,  but  no 
delay  shall  be  so  allowed  for  unless,  during  the  delay,  such  pro- 
*  ceedings  shall  be  diligently  prosecuted  by  or  for  the  Subway 
Company ;  and  provided,  further,  that  in  no  case  shall  such  delay 
be  deemed  to  begin  until  the  Subway  Company  shall  have  given 
written  notice  to  the  Commission  of  the  injunction  or  other  occa- 
sion of  delay  and  delivered  to  the  Commission  copies  of  the 
injunction  or  other  orders  and  of  the  papers  upon  which  the 
same  shall  have  been  granted,  and  unless,  upon  the  request  of 
the  Commission,  the  Subway  Company  shall  in  writing  consent 
that  the  Commission,  either  in  its  own  name  as  a  party  or  in  the 
name  of  the  City  as  a  party,  may  intervene  in  any  such  injunc- 
tion proceedings,  or  other  suit  or  proceeding;  and  provided,  fur- 
ther, that  in  case  of  forfeiture  of  any  part  of  the  authorization 
or  licenses  the  Subway  Company  shall  have  no  right  to  any  re- 
turn of  payments  which  it  shall  have  made  to  the  City  by  way 
of  rental  or  otherwise. 
Suspension  of  The  construction  of  the  third  track  on  either  Line  (or  any 

construction  of  .  .  rx  ,  .     , 

third  track  portion  thereof)  respectively  may  be  deferred  during  such  time 
as  shall  be  approved  by  the  Commission  provided,  however,  that 
after  the  Subway  Company  shall  have  obtained  the  consents 
aforesaid,  the  Subway  Company  shall  begin  the  construction  of 
the  said  third  tracks  within  six  (6)  months  after  it  shall  be 
directed  to  begin  the  construction  thereof  by  the  Commission, 
and  within  two  (2)  years  thereafter  shall  complete  the  same 
and  begin  operation  thereof. 

IV 

Plans  and  The  maps  and  profiles  of  the  Railroads,  herewith  attached, 

profiles  bearing  the  general  title  "State  of  New  York,  Public  Service 

Commission    for   the   First   District,   Engineering   Department," 

8 


CONSTRUCTION    OF   TJJE   RAILROADS 

signed  by  the  Engineer,  dated  January  25,  1913,  and  numbered 
and  designated  respectively: 

File  No.  3,  Drawing  No.  125,  Map  and  Profile  of  the 
Jamaica  Line  of  the  New  York  Municipal  Railway  Cor- 
poration. 

File  No.  3,  Drawing  No.  127,  Map  and  Profile  of  the 
Liberty  Avenue  Line  of  the  New  York  Municipal  Railway 
Corporation. 

are  to  be  deemed  a  part  of  this  certificate  and  to  be  construed 
with  the  text  hereof.  The  same  shall  be  substantially  followed, 
but  deviations  therefrom  not  inconsistent  with  the  other  pro- 
visions hereof  may  be  permitted  by  the  Commission. 

The  Railroads,  with  necessary  sidings,  turnouts  and  switches,  To  follow  gen~ 
shall  follow  the  general  design  of  the  elevated  railroads  known  Van  Cortiandt 
as   the  Van   Cortiandt   Park   Extension   heretofore   constructed  Park  Extension 
under  the  contract  dated  February  21,   1900,  for  the  construc- 
tion, equipment  and  operation  of  the  Manhattan-Bronx  Rapid 
Transit  Railroad. 

The   sidings   constructed   shall   be   such   as   the   Commission  Sidings 
shall  approve  as  necessary  for  the  convenient  operation  of  the 
Railroads  and  shall  not  exceed  in  length,   for  any  line  of  the 
Railroads,   one  quarter  of  a  mile  for  each  mile  of  railway  of 
such  line. 

No  crossing  is  to  be  made  at  grade  between  tracks  of  diverg-   Grade  crossings 
ing  lines  without  the  approval  of  the  Commission. 

The  columns  supporting  the  superstructure  of  the  elevated  Location  of 
portions  of  the  Railroads  except  as  hereinafter  otherwise  pro- 
vided, may  be  placed  within  the  roadway,  but  not  less  than 
thirteen  (13)  feet  from  the  curb  lines  upon  either  side;  the 
interior  transverse  distance  between  the  columns  shall  not  be 
less  than  twenty-three  (23)  feet;  and  the  center  line  of  the  said 
elevated  structure  shall  coincide  as  nearly  as  may  be  with  the 
center  line  of  the  street.  Where,  however,  the  width  of  the  street 
is  not  sufficient  to  provide  for  a  roadway  upon  each  side  of  the 
columns  or  wherever  by  reason  of  special  or  local  conditions,  it 
may  not  in  the  judgment  of  the  Commission  be  desirable  to 
locate  the  columns  as  herein  first  provided,  the  columns  may  be 
located  either  in  the  roadway  or  within  the  curb  lines,  as  may 
be  expressly  approved  by  the  Commission. 

The  tracks  of  the  elevated  portions  of  the  Railroads  may   Girders 
rest  upon  longitudinal  and  transverse  girders  supported  by  the 

9 


CONSTRUCTION   OF  THE   RAILROADS 


Clearance 


Structural 
details 


Plans  and 
drawings  to  be 
submitted  to 
Commission 


Subway  Com- 
pany may  open 
streets,  etc. 


Permits 


Right  of 
inspection 


Sanitary  and 
police  juris- 
diction 


said  columns,  but  no  portion  of  the  said  girders,  except  with  the 
approval  of  the  Commission,  shall  approach  within  fourteen  (14) 
feet  of  the  surface  of  the  roadway. 

The  structural  details  employed  in  constructing  the  elevated 
portions  of  the  Railroads  shall  be  substantially  similar  to  the 
structural  details  employed  in  the  construction  of  the  said  Van 
Cortlandt  Park  Extension,  except  as  aforesaid. 

All  plans  and  drawings  for  the  construction  of  the  Railroads 
other  than  mere  shop  drawings  shall  be  submitted  to  and  ap- 
proved by  the  Commission  in  advance  of  construction,  and  the 
method  of  carrying  on  the  work  shall  be  subject  to  the  approval 
of  the  Commission.  Shop  drawings  shall  so  far  as  possible  be 
filed  with  the  Commission.  The-  right  reserved  to  the  Commis- 
sion to  approve  the  plans  and  drawings  in  advance  of  construc- 
tion shall  include  the  right  to  approve  or  disapprove  the  precise 
location  of  all  tracks,  columns,  platforms,  stations,  stairways,  es- 
calators or  other  means  of  access  to  the  Railroads  and  all  other 
structures  appurtenant  thereto  encroaching  upon  the  surface  of 
the  streets. 

The  Subway  Company  shall  be  authorized  to  open  and  oc- 
cupy so  much  of  the  surface  of  the  street  or  streets  affected  by 
this  grant  and  to  erect  thereon  such  temporary  supports  as  may 
be  necessary  for  the  purpose  of  building  the  said  railroad  struc- 
tures ;  but  the  Commission  may,  whenever  it  deems  it  advisable, 
prescribe  the  manner  in  which  the  said  work  shall  be  performed. 
All  necessary  permits  for  opening  of  streets,  and  other  necessary 
departmental  permits,  shall  be  obtained  from  the  President  of 
the  Borough,  or  other  officer  as  provided  by  law. 

The  City,  the  Commission  and  all  duly  authorized  represen- 
tatives of  the  City  and  the  Commission,  shall  have  the  right  at 
all  reasonable  times  to  inspect  the"  Railroads  herein  authorized, 
and  any  part  thereof,  as  well  during  construction  as  afterwards, 
and  to  enter  thereon  when  necessary,  for  the  examination,  super- 
vision or  care  of  any  property  of  the  City,  or  of  abutting  prop- 
erty owners,  or  for  any  proper  purpose.  Such  inspection  shall 
include  the  inspection  and  approval  of  all  materials,  and  the  erec- 
tion thereof,  used  in  the  construction  of  the  Railroads.  Nothing 
in  this  franchise  shall  be  deemed  to  diminish  or  affect  the  sani- 
tary or  police  jurisdiction  which  the  public  authorities  shall  law- 
fully have  over  property  in  the  City. 


10 


OPERATION  OF  THE  RAILROADS 
V 

The  Subway  Company  shall  procure  all  necessary  easements   Real  estate 
and  rights,  titles  and  interests  in  real  estate  for  the  construction 
of  the  Railroads. 

The  Subway  Company  shall  make  good  to  the  City  all  physi-  Physical 
cal  but  not  consequential  damage  which  shall  be  done  to  the  c 
property  of  the  City  by  the  construction  or  operation  of  the  Rail- 
roads, and  shall  make  good  to  every  owner  of  property  abutting 
upon  the  Railroads,  or  which  shall  be  injured  by  the  work  of 
constructing  or  operating  the  same,  all  physical  damage  which 
shall  be  done  to  such  abutting  or  injured  property,  through  any 
act  or  omission  of  the  Subway  Company,  its  successors,  assigns, 
or  lessees,  or  any  contractor,  sub-contractor  or  other  person  em- 
ployed upon  the  construction  or  operation  of  the  Railroads,  or 
any  part  thereof. 

The  Subway  Company  shall  in  the  course  of  construction  at  its   Care  of  surface 

.          .         ,  r      11  f  j  c  an(i  subsurface 

own  expense  maintain  the  care  of  all  street  surfaces  and  surface   structures 
and  subsurface  structures  which  may  be   interfered  with,  and 
any  necessary  interference  therewith  shall  be  subject  to  reason- 
able regulation  by  the  department  of  the  government  of  the  City 
in  control  or  charge  thereof. 

VI 

The  Subway  Company  (during  the  period  of  joint  operation  Rate  of  fare 
with  the  Subway  Railroads)  shall  be  entitled  to  charge  for  a 
single  fare  for  each  passenger  for  one  continuous  trip  in  the 
same  general  direction  over  the  Railroads  and  the  additional 
tracks  authorized  by  a  certificate  granted  by  the  Commission 
to  the  Subway  Company  bearing  even  date  herewith  (hereinafter 
referred  to  as  the  "additional  tracks"),  the  existing  railroads  and 
Subway  Railroads  the  sum  of  five  (5)  cents  but  not  more, 
except  as  otherwise  provided  in  Article  LXII  of  the  subway 
contract.  After  the  end  of  such  period  of  joint  operation  the 
Subway  Company  shall  be  entitled  to  charge  for  a  single  fare 
for  each  passenger  for  one  continuous  trip  in  the  same  general 
direction  over  the  Railroads,  the  additional  tracks  and  the  exist- 
ing railroads  the  sum  of  five  (5)  cents  but  not  more. 

VII 

The  Railroads  shall  be  carefully  and  skilfully  operated,  ac-  'skillful 
cording  to  the  highest  standards  of  railroad  operation,  and  with   operation 

11 


OPERATION  OF  THE  RAILROADS 


Maintenance 


Power  to  be 
used 


May  transport 
passengers  and 
property 


No  advertising 
on  Railroads 


nor  trade, 
traffic  or 
occupation 


newspapers, 
etc. 


If  Rapid  Tran- 
sit  Act  be 
amended 


due  regard  to  the  safety  of  the  passengers  and  employees  and 
of  all  other  persons.  The  Subway  Company  shall  during  the 
term  of  the  grant  keep  the  plant  and  property  (as  the  words 
"plant  and  property"  are  hereinafter  defined)  of  the  Railroads 
and  each  and  every  part  thereof  in  thorough  repair,  and  shall 
restore  and  replace  every  necessary  part  thereof  which  may  wear 
out  or  cease  to  be  useful,  so  that  at  all  times  and  at  the  termi- 
nation of  the  grants  such  plant  and  property  of  the  Railroads 
shall  be  in  thoroughly  good  and  solid  condition. 

The  power  to  be  used  shall  be  electricity  or  compressed  air 
so  used  as  to  involve  no  combustion  or  impurity  of  air  in  cars 
or  any  other  power  of  like  description  approved  by  the  Com- 
mission. 

The  Subway  Company  may  transport  over  the  Railroads  pas- 
sengers and  property,  provided,  however,  that  the  use  of  the 
Railroads  for  the  transportation  of  property  shall  not  to  any 
extent  or  in  any  way  interfere  with  the  use  of  the  Railroads  to 
their  fullest  capacity,  if  required,  for  the  carriage  of  passengers. 

No  part  of  the  Railroads,  or  stations  or  other  appurtenances 
thereof,  shall  be  used  for  advertising  purposes,  except  that  the 
Subway  Company  may  use  the  structure  for  posting  necessary 
information  for  the  public  relative  to  the  running  of  trains  and 
to  the  operation  of  the  Railroads ;  nor  shall  any  trade,  traffic  or 
occupation,  other  than  required  for  the  operation  of  the  Rail- 
roads, be  permitted  thereon  or  in  the  stations  thereof,  except  such 
sale  of  newspapers  and  periodicals  as  may,  from  time  to  time, 
always  with  the  right  of  revocation,  be  permitted  by  the  Com- 
mission. In  case  the  present  provisions  of  the  Rapid  Transit 
Act  in  respect  of  advertising  or  the  carrying  on  of  any  trade, 
traffic  or  occupation  are  amended,  the  Commission,  under  rules 
and  regulations  to  be  prescribed  by  it,  may  permit  the  Subway 
Company  to  carry  on  such  advertising  or  such  trade,  traffic  or 
occupation  in  accordance  with  the  Rapid  Transit  Act  as  it  may 
be  amended  from  time  to  time. 


VIII 


City's  com-  Inasmuch  as  the  City's  compensation  for  the  authorizations  or 

pensation  and 

exercise  of  right   licenses  hereby  given  and  its  exercise  of  its  right  to  take  over 


to  take  over 
affected  by 
expenditures 


the  plant  and  property  of  the  Railroads  will  be  affected  by  the 
amount  of  the  Subway  Company's  expenditures  on  account  of 
constructing,  equipping,  maintaining  and  operating  the  Railroads, 
the  Subway  Company  shall  strictly  comply  with  the  provisions 


12 


SUPERVISION    AND   INSPECTION 

hereof  for  assuring  to  the  Commission  supervision  by  it  of  all 
operations   of  the   Subway   Company.     The   Subway   Company 
shall,  therefore,  in  addition  to  providing  facilities  for  inspection 
as  hereinbefore  provided,  provide  the  Commission  with  all  facili-  Subway  Com- 
ties  necessary  or  convenient  to  afford  the  Commission  full  and  fadiitieTfor" 
complete  supervision  of  all  operations  of  the  Subway  Company   supervision 
in  or  about  the  enterprise  of  constructing,  equipping,  maintain- 
ing and  operating  the  Railroads.    The  Subway  Company  and  any 
construction  or  supply  company  controlled  by  the  Subway  Com- 
pany or  by  any  company  directly  or  indirectly  controlling  the 

Subway  Company  or  affiliated  with  the  Subway  Company  shall 

•    ui  j       c     11   Proper  books' 

keep  suitable  and  proper  books,  records  and  memoranda  01  all  etc.,  to  be  kept 

operations  with  contractors,  bankers,  or  persons  furnishing  labor, 
material,  money  or  supplies  and  all  contracts  directly  or  indi- 
rectly affecting  the  actual  cost  of  the  plant  and  property  of  the 
Railroads  and  directly  or  indirectly  affecting  the  equipment,  main- 
tenance or  operation  of  the  Railroads,  showing  in  detail  such 
cost  to  the  Subway  Company,  or  to  any  such  construction  com- 
pany, including  any  additions  constructed  or  provided  from  time 
to  time,  and  shall  afford  access  to  and  permit  the  examination, 
use  and  production  of  any  such  books,  records,  memoranda  or 
contracts  to  the  extent  that  the  same  have  to  do  therewith. 

The  Lessee  shall  (except  in  such  cases  where  permission  to 
do  otherwise  is  expressly  granted  from  time  to  time  by  the  Com- 
mission by  a  resolution  entered  in  its  minutes)  before  entering 
into  any  contract,  agreement,  mortgage  or  undertaking  having  to  Contracts  for 

j  .  ,       ,  .  .  r    ,1         -r>     M          j  1.  construction  or 

do  with  the  constructing  or  equipping  of  the  Railroads,  submit  equipment 
the  same  to  the  Commission  for  its  approval  and  the  Commis-  to  be  sub~ 

j.   .  -   .  \  .  ,    mitted  to 

sion  may  as  a  condition  of  its  approval  require  the  insertion  of  commission 
such  terms  and  conditions  therein  as  it  may  deem  necessary. 
The  Commission  may  further  require  the  Subway  Company  be- 
fore entering  into  any  agreement  having  to  do  with  the  construc- 
tion or  equipment  of  the  Railroads  to  ask  for  proposals  upon 
form  of  contracts  satisfactory  to  the  Commission,  in  a  specific 
manner  and  for  a  specified  time. 

Any  contract,  agreement  or  undertaking  having  to  do  with   what  contracts 
the  maintenance  or  operation  of  the  Railroads  extending  beyond  a  n^ncTo^opera- 
period  of  one  year  or  involving  an  expenditure  in  excess  of  Fifty   tion  to  be 
Thousand  ($50,000)  Dollars  (and  any  other  contract,  agreement 
or  undertaking  having  to  do  with  the  maintenance  or  operation 
of  the  Railroads  which  the  Subway  Company  shall  desire  to  make 
subject  to  the  approval  of  the  Commission)  shall  be  entered  into 
by  the  Subway  Company  subject  to  the  approval  of  the  Com- 

13 


SUPERVISION   AND   INSPECTION 


Payments 
thereunder  not 
subject  to 
objection 


Certain  con- 
tracts not  to 
extend  over 
five  years 


Commission 
may  establish 
system  of 
accounts 


Alterations 


Regulations  as 
to  vouchers  and 
pay-rolls 


mission,  which  approval  shall  be  evidenced  by  entries  in  its 
minutes.  Any  payments  made  under  any  such  contract  so  ap- 
proved by  the  Commission  shall  not  be  subject  to  objection  under 
the  provisions  hereinafter  contained  unless  the  payments  there- 
under shall  not  be  in  accordance  with  the  terms  of  such  contract. 
The  provisions  of  this  paragraph  shall  also  apply  to  all  contracts, 
agreements  or  undertakings  of  the  character  specified  in  this 
paragraph  entered  into  after  the  date  hereof  which  are  to  con- 
tinue in  force  after  the  beginning  of  operation. 

No  contract,  agreement  or  undertaking  affecting  the  main- 
tenance or  operation  of  the  Railroads  (except  mortgages,  assign- 
ments, leases,  trackage  agreements,  power  and  advertising  con- 
tracts, agreements  amending  or  supplementing  this  certificate,  or 
the  Subway  Contract  or  the  certificate  for  additional  tracks  bear- 
ing even  date  herewith,  and  any  contracts,  agreements  or  under- 
takings amending,  supplementing  or  extending  any  such  instru- 
ments) shall  extend  over  a  period  in  excess  of  five  (5)  years. 

The  Commission  may,  whenever  it  deems  advisable,  establish 
a  system  of  accounts  to  be  used  by  the  Subway  Company  in  con- 
nection with  the  construction,  equipment,  maintenance  and  opera- 
tion of  the  Railroads  and  may  prescribe  the  manner  in  which 
such  accounts  shall  be  kept.  It  may  also  in  its  discretion  pre- 
scribe the  form  of  accounts,  records  and  memoranda  to  be  kept 
by  the  Subway  Company  in  connection  with  the  construction  or 
equipment,  maintenance  and  operation  of  the  Railroads,  includ- 
ing the  accounts,  records  and  memoranda  of  the  movements  of 
traffic  as  well  as  the  receipts  and  expenditures  of  moneys.  Rea- 
sonable notice  of  alterations  by  the  Commission  in  the  required 
method  or  form  of  keeping  a  system  of  accounts  shall  be  given 
to  the  Subway  Company  by  the  Commission.  The  Commission 
shall  at  all  times  have  access  to  all  such  accounts,  records  and 
memoranda  kept  by  the  Subway  Company  and  may  designate 
any  of  its  officers  or  employees  who  shall  thereupon  have  author- 
ity under  the  order  of  the  Commission  to  inspect  and  examine 
any  and  all  accounts,  records  and  memoranda  kept  by  the  Sub- 
way Company.  The  Commission  may,  after  hearing,  prescribe 
by  order  the  accounts  in  which  particular  outlays  and  receipts 
shall  be  entered,  charged  or  credited. 

The  Commission  may  from  time  to  time  adopt  regulations, 
which  shall  be  evidenced  by  entries  in  its  minutes,  which  the 
Subway  Company  shall  strictly  comply  with,  as  to  the  form  of 
all  vouchers  and  payrolls  having  to  do  with  the  actual  cost  of 
the  plant  and  property  of  the  Railroads,  and  with  the  cost  of 


14 


SUPERVISION   AND   INSPECTION 

maintaining  and  operating  the  Railroads,  to  the  end  that  the  cost 
data  relating  to  various  divisions  of  the  enterprise  of  construct- 
ing, equipping,  maintaining  and  operating  the  Railroads  can,  at  all 
times,  be  promptly  and  accurately  determined  and  the  property 
identified. 

No  payment,  credit,  compensation  or  concession  of  whatso-   Vouchers,  etc. 

e    to  be  filed 

ever  character  having  in  any  way  to  do  with  the  actual  cost  of 
the  plant  and  structure  and  equipment  of  the  Railroads  shall  be 
determined  to  be  part  of  the  actual  cost  of  the  plant  and  struc- 
ture and  equipment  unless  the  Subway  Company  upon  making 
such  payment,  credit,  compensation  or  concession  shall  forthwith 
file  with  the  Commission  a  duplicate  voucher  credit  slip  or  other 
original  evidence  thereof. 

The  Commission  may  object  to  any  expenditure,  as  unreason-  Commission 
able  or  improper,  made  or  to  be  made  by  the  Subway  Company  ^^j^v' 
in  connection  with  maintaining  and  operating  the  Railroads  by 
notice  thereof  to  the  Subway  Company.  If  the  objection  by  the 
Commission  refers  to  an  expenditure  already  made,  the  Subway 
Company  forthwith  upon  receipt  of  notice  shall  remove  the 
amount  from  the  account  or  accounts  to  which  it  had  been 
charged  and  hold  the  same  in  a  suspense  account  until  the  item 
in  dispute  is  adjudicated.  If  the  objection  refers  to  an  expendi-  Procedure  in 
ture  to  be  made,  the  Subway  Company,  if  it  make  such  expendi-  ^  ° 
ture,  shall  charge  to  and  hold  the  same  in  a  suspense  account  until 
the  item  in  dispute  is  adjudicated.  In  case  the  Commission  and 
the  Subway  Company  are  unable  within  five  (5)  days  after  the 
delivery  of  such  notice,  Saturdays,  Sundays  and  Holidays  ex- 
cepted,  to  agree  upon  the  reasonableness  and  propriety  of  such 
expenditure,  the  same  shall  be  determined  by  arbitration  or  by 
the  Court.  Such  arbitration  shall  be  conducted  in  accordance  Arbitration 
with  the  provisions  hereinafter  contained  except  that  the  period 
for  the  appointment  of  arbitrators  as  hereinafter  prescribed  shall 
for  the  purposes  of  all  arbitration  under  this  paragraph  be  re- 
duced to  five  (5)  days — Saturdays,  Sundays  and  Holidays  ex- 
cepted.  Such  notice  of  objection  shall  be  given  by  the  Commis- 
sion within  thirty  (30)  days  after  the  Commission  has  become 
cognizant  of  such  expenditure,  unless  satisfactory  reasons  are 
given  for  any  delay.  Any  such  delay  shall  not  excuse  the  Sub- 
way Company  from  complying  with  the  provisions  hereof  in  re- 
spect of  the  money  to  be  held  in  reserve,  but  such  delay  may  be 
set  up  by  the  Subway  Company  as  a  defense  to  the  objection, 
and  the  adequacy  of  the  reason  given  for  such  delay  shall  be 

15 


SUPERVISION   AND   INSPECTION 


If  expenditure 
be  found  rea- 
sonable and 
proper 


If  unreason- 
able or  im- 
proper 


Inspection 


Subway  Com- 
pany to  afford 
facilities,    etc. 


When  this 
article  inopera- 


determined  by  arbitration  or  by  the  court.  If  it  be  agreed  by 
the  Commission  and  the  Subway  Company  or  determined  by 
arbitration  or  by  the  court  that  the  expenditure  so  objected  to  is 
reasonable  and  proper,  the  amount  thereof  shall  be  charged  to 
operating  expenses  and  the  interest  thereon,  if  any,  shall  be 
charged  against  interest  revenue.  If,  on  the  other  hand,  it  be 
so  agreed  or  so  determined  that  such  expenditure  is  unreason- 
able or  improper,  the  amount  thereof  with  interest  shall  be  borne 
by  the  Subway  Company.  Similarly,  if  any  expenditure  shall 
be  so  agreed  or  so  determined  to  be  unreasonable  or  improper 
in  part,  the  charges  for  such  part  shall  be  adjusted  in  the  same 
manner  as  the  charges  for  the  whole  amounts  as  hereinbefore 
provided. 

The  Commission  contemplates,  and  the  Subway  Company 
hereby  approves,  the  most  thorough  and  minute  inspection  by 
the  Commission  and  the  Engineer  and  by  their  representatives 
or  subordinates,  of  all  work  and  materials  (and  of  the  manu- 
facture or  preparation  of  such  materials)  entering  into  the  con- 
struction and  equipment  of  the  Railroads.  The  Subway  Com- 
pany shall,  therefore,  at  all  times  give  to  the  Commission  and 
its  members,  to  the  Engineer  and  his  assistants  and  subordinates, 
and  to  any  person  designated  by  the  Commission  or  its  Chair- 
man, all  facilities,  whether  necessary  or  convenient,  for  inspect- 
ing the  materials  to  be  furnished  and  the  work  to  be  done  in  and 
about  the  same.  The  members  of  the  Commission,  the  Engineer 
and  any  assistant  or  other  person  bearing  his  authorization  or  the 
authorization  of  the  Commission  or  its  Chairman  shall  be  ad- 
mitted at  any  time  summarily  and  without  delay  to  any  part  of 
the  work  or  to  the  inspection  of  materials  at  any  place  or  stage 
of  their  manufacture,  preparation,  shipment  or  delivery. 

The  provisions  of  this  article  in  so  far  as  they  provide  for 
supervision  of  operation  shall  be  inoperative  for  so  long  as  the 
compensation  to  be  paid  for  the  Railroads  shall  not  be  a  portion 
or  percentage  of  income,  earnings  or  profits. 


IX 


Determination 
of  actual  cost 


"Plant  and 
property" 


The  actual  cost  of  the  plant  and  property  of  the  Railroads 
shall  be  determined  as  follows : 

The  words  "PLANT  AND  PROPERTY"  as  used  herein  mean  as 
to  any  of  the  Railroads,  the  equipment  and  the  plant  and  struc 
ture  thereof. 


16 


structure" 


DETERMINATION    OF  ACTUAL   COST 

The  word  "EQUIPMENT"  means  as  to  any  of  the  Railroads,  "Equipment" 
all  cars,  rolling  stock,  motors,  power  sub-stations  and  the  real 
estate  upon  which  they  are  built  and  all  wires,  cables  and  con- 
duits suitable  to  and  necessarily  provided  and  used  for  the  pur- 
poses of  tlie  Railroads  not  affixed  to  the  railroad  structure  in 
streets  or  on  rights  of  way  (including  additions),  provided,  how- 
ever, that  the  cars,  rolling  stock  and  motors  shall  be  such  only  as 
are  specially  purchased  or  constructed  for  use  upon  the  Rail- 
roads, which  shall  at  the  time  of  purchase  or  construction  be 
identified  by  suitable  marking  as  "extension  equipment." 

The  words  "PLANT  AND  STRUCTURE"  mean  as  to  any  of  the  "Plant  and 
Railroads,  the  foundations,  structures,  tracks,  stations,  terminal 
rooms,  stairways  and  means  of  access  thereto,  consents,  ease- 
ments and  rights  of  way  and  interests  in  real  estate  connected 
with  the  railroad  as  distinguished  from  the  equipment  as  herein- 
before defined,  terminal  and  storage  yards  and  shops,  and  signal 
towers,  signal  devices  contact  rails,  telephone  and  telegraph  wires, 
wires,  cables  and  all  other  fixtures  suitable  to  and  necessarily 
used  for  the  purposes  of  the  Railroads  affixed  to  the  railroad 
structure  in  streets  and  on  rights  of  way  including  additions. 

The  word  "ADDITION"  as  used  in  this  article  with  reference  to 
equipment  or  plant  and  structure  means  a  betterment,  improve- 
ment or  addition,  made  during  the  term  of  this  grant,  ordered 
or  approved  by  the  Commission  in  advance  of  the  construction 
or  provision  thereof,  to  or  of  either  the  equipment  or  plant  and 
structure  as  originally  completed  and  put  in  operation,  excluding 
anything  furnished  in  the  nature  of  repairs,  maintenance,  replace- 
ments or  substitution. 

The  words  "DEBT  DISCOUNT  AND  EXPENSE"  to  mean  the  actual  "Debtdiscount 
and- necessary  expense  to  the  Subway  Company  (including  dis-  andexPense" 
counts)  involved  in  the  issuance  and  disposal  of  securities  issued 
by  the  Subway  Company  to  provide  means  for  constructing  and 
equipping  the  Railroads  or  for  additions,  deducting  therefrom 
any  premiums  received  by  or  on  behalf  of  the  Subway  Com- 
pany upon  or  in  connection  with  the  disposal  of  such  securities. 

The  words  "ACTUAL  COST"  mean  as  to  any  of  the  Railrdads,   "Actual cost" 
in  respect  to  the  equipment  thereof : 


"Addition" 


in  respect  of 
equipment 


(1)   The  actual  and  necessary  net  cost  in  money  to  the  Sub-  Labor  and 
way  Company   for   acquisition,   or   for  all   labor  and  materials   matenals 
entering  into  the  construction,  of  the  equipment  and  additions 
thereto  from  time  to  time,  other  than  repairs,  maintenance,  re- 
placement or  substitutions. 


17 


Debt  discount 
and  expense 


DETERMINATION    OF   ACTUAL   COST 

Real  estate  (2)   The  actual  and  necessary  net  cost  in  money  to  the  Sub- 

way Company  of  any  real  estate  or  interests  therein  including 
consents  and  easements  necessarily  acquired  for  the  construction 
or  operation  of  equipment  or  such  additions  thereto,  other  than 
replacements  or  substitutions  together  with  the  actual  and  neces- 
sary expenses  in  connection  with  such  acquisition. 

(3)  The  debt  discount  and  expense  actually  and  necessarily 
incurred  in  connection  with  the  equipment  and  additions  thereto 
from  time  to  time,  provided,  however,  that  the  debt  discount  and 
expense,  except  in  the  case  of  additions,  shall  not  exceed  an 
amount  equal  to  three  per  centum  (3%)  of  the  actual  cost  of 
equipment  including  in  such  actual  cost  the  expenditures  under 
this  paragraph. 

Taxes  (4)   Taxes  and  assessments  actually  and  necessarily  paid  or 

accrued  upon  the  items  of  this  definition  pending  the  beginning 
of  operation,  including  in  the  word  "taxes"',  assessments  or  other 
governmental  charges  (including  mortgage  recording  tax)  of 
every  description  against  the  Subway  Company  in  and  about  the 
construction  or  acquisition  of  Equipment  and  additions  thereto 
from  time  to  time.  During  operation  such  assessments  for  bene- 
fits as  are  not  properly  chargeable  against  revenue  shall  be 
charged  to  such  actual  cost. 

(5)  The  actual  and  necessary  net  cost  in  money  to  the  Sub- 
way Company  for  superintendence,  insurance,  damages,  engi- 
neering, legal  expenses,  insurance  and  administration  in  and  about 
the  acquisition  or  construction  of  equipment  or  such  additions 
thereto,  including  in  respect  of  equipment  (exclusive  of  addi- 
tions) the  expenses  above  referred  to  in  this  paragraph  actually 
and  necessarily  incurred  or  payable  by  the  Subway  Company, 
prior  to  the  date  of  this  certificate  and  in  addition  the  actual 
and  necessary  expense  incurred  or  payable  by  the  Subway  Com- 
pany in  printing,  engraving  and  certifying  securities  for  equip- 
ment, (exclusive  of  additions)  and  the  actual  and  necessary  ex- 
pense in  organizing  the  Subway  Company. 

interest  (6)   Interest   actually   and   necessarily   paid   or   accrued    on 

moneys  provided  by  the  Subway  Company  or  on  its  behalf  from 
time  to  time  for  the  items  of  this  definition  from  the  respective 
times  of  providing  said  moneys  (but  not  including  interest  on 
any  moneys  provided  by  the  Subway  Company  or  on  its  behalf 
prior  to  October  1,  1912)  to  the  beginning  of  operation  of  the 

18 


Superinten- 
dence, etc. 


DETERMINATION    OF    ACTUAL    COST 

part  of  the  equipment  for  which  such  moneys  were  provided,  less 
any  interest  received  by  the  Subway  Company  or  on  behalf  of 
the  Subway  Company  on  such  moneys. 

Provided,  however,  that  the   actual  and  necessary  net  cost   Replacements, 
in  money  of  all  replacements,  substitutions  or  renewals  not  due  eluded 
to  wear  and  tear  from  operation  and  necessitated  by  the  recon- 
struction o.f  parts  of  the  existing  structures  of  the  said  Subway 
Company   for   the   purpose   of   physically   connecting   the   same 
with  the  Railroads  shall  be  deemed  to  be  included  in  the  fore- 
going definition  of  actual  cost  of  equipment. 

The  words  "ACTUAL  COST"  mean  as  to  any  of  the  Railroads,   "Actual  cost" 


in  respect  to  the  plant  and  structure  thereof  :  ° 


structure 

(  1  )   The  actual  and  necessary  net  cost  in  money  to  the  Sub-   Labor  and 
way  Company  of  all  labor  and  materials  entering  into  the  con-   matenals 
struction   of  the  plant  and   structure   and  permanent  additions 
thereto  from  time  to  time  other  than  repairs,  maintenance  replace- 
ments or  substitutions. 

(2)  The  actual  and  necessary  net  cost  in  money  to  the  Sub- 

way Company  of  any  real  estate  or  interest  therein,  including   Reai  estate 

consents  and  easements  necessarily  acquired  for  the  construction 

or  operation  of  the  plant  and  structure,  or  such  permanent  addi- 

tions thereto,  other  than  replacements  or  substitutions,  together 

with  the  actual  and  necessary  expenses  in  connection  with  such 

acquisition. 

(3)  The  debt  discount  and  expense  actually  and  necessarily   Debt  discount 
incurred  in  connection  with  the  construction  of  the  plant  and   andexPense 
structure  and  additions  thereto  from  time  to  time,  provided,  how- 

ever, that  the  debt  discount  and  expense,  except  in  the  case  of  • 
additions,  shall  not  exceed  an  amount  equal  to  three  per  centum 
(3%)  of  the  actual  cost  of  the  plant  and  structure  including  in 
such  cost  the  expenditures  under  this  paragraph. 

(4)  Taxes  and  assessments  actually  and  necessarily  paid  or   Taxes 
accrued  upon  the  items  of  this  definition  pending  the  beginning 

of  operation,  including  in  the  word  "taxes",  assessments  or  other 
governmental  charges  (including  mortgage  recording  tax)  of 
every  description  against  the  Subway  Company  in  and  about  the 
construction  of  the  plant  and  structure  and  additions  thereto 
from  time  to  time.  During  operation  such  assessments  for  bene- 
fits as  are  not  properly  chargeable  against  revenue  shall  be 
charged  to  such  actual  cost. 

19 


bETfiRMlNATION    OF   ACfUAL   COST 


Superinten- 
dence, etc. 


(5)  The  actual  and  necessary  net  cost  in  money  to  the  Sub- 
way Company  for  superintendence,  damages,  insurance,  engineer- 
ing, legal  expenses  and  administration,  in  and  about  the  construc- 
tion or  acquisition  of  the  plant  and  structure  or  such  additions 
thereto  or  the  improvements  or  betterments  aforesaid  and  in- 
cluding in  respect  of  the  plant  and  structure  (exclusive  of  addi- 
tions) the  expenses  above  referred  to  in  this  paragraph  actually 
and  necessarily  incurred  or  payable  by  the  Subway  Company 
prior  to  the  date  of  this  certificate  and  in  addition  the  actual  and 
necessary  expense  incurred  or  payable  by  the  Subway  Company 
in  printing,  engraving  and  certifying  securities  for  the  plant  and 
structure,  (exclusive  of  additions)  and  the  actual  and  necessary 
expense  in  organizing  the  Subway  Company. 


interest  (6)   Interest   actually   and   necessarily   paid   or   accrued    on 

moneys  provided  by  the  Subway  Company  or  on  its  behalf  from 
time  to  time  for  the  items  of  this  definition  from  the  respective 
time  of  providing  said  moneys  (but  not  including  interest  on  any 
moneys  provided  by  the  Subway  Company  or  on  its  behalf  prior 
to  October  1,  1912)  to  the  beginning  of  operation  on  the  part  of 
the  plant  and  structure  for  which  such  moneys  were  provided, 
less  any  interest  received  by  the  Subway  Company  or  on  behalf 
of  the  Subway  Company  on  such  moneys. 

Provided,  however,  that  the  actual  and  necessary  net  cost  in 

Replacements,    money  of  all  replacements,  substitutions  or  renewals  not  due  to 

etc.,  not  in-  ,    _,  , 

eluded  wear  and  tear  from  operation  and  necessitated  by  the  construc- 

tion of  parts  of  the  existing  structures  of  the  said  Subway  Com- 
pany for  the  purpose  of  physically  connecting  the  same  with  the 
Railroads  shall  be  deemed  to  be  included  in  the  foregoing  defini- 
tion of  actual  cost  of  plant  and  structure. 

If  any  profit,  salvage,  rebate  or  benefit  (not  including  profits 
from  operation)  from  any  source  derived  shall  accrue  directly 
or  indirectly  to  the  Subway  Company  or  on  its  behalf  in  any  man- 
ner out  of  or  in  connection  with  the  construction  or  acquisition 
of  such  plant  and  structure  or  additions  thereto,  or  equipment 
or  additions  thereto,  then  the  amount  of  any  such  profit,  salvage, 
rebate  or  benefit  shall  be  deducted  from  the  cost  of  the  other 
items  referred  to. 

The  Engineer  shall  within  six  (6)  months  after  the  date  of 
this  certificate  render  a  determination  in  writing  in  duplicate  to 
the  Commission  and  to  the  Subway  Company  of  the  actual  cost  of 
the  plant  and  structure  and  of  the  actual  cost  of  equipment  paid 
or  accrued  prior  to  the  date  of  this  certificate.  In  the  case  of  all 


If  profit,  etc., 
shall  accrue  to 
S.ubway 
Company 


Actual  cost 


20 


DETERMINATION    OF   ACTUAL   COST 

work  done  after  the  date  of  this  certificate  the  Engineer  shall, 
on  or  about  the  first  days  of  January,  April,  July  and  October, 
in  each  year  during  construction  or  during  the  provision  of  equip- 
ment, (including  the  construction  or  provision  of  additions) 
render  a  determination  in  writing,  in  duplicate,  to  the  Commis- 
sion and  to  the  Subway  Company  of  the  actual  cost  of  the  plant 
and  structure  and  of  the  actual  cost  of  equipment  to  the  date  of 
the  last  day  of  the  preceding  quarter,  including  therein  separately 
a  determination  of  the  actual  cost  of  the  plant  and  structure  and 
actual  cost  of  equipment  during  the  quarter  year  immediately 
preceding  the  date  of  such  determination.  If  either  the  Commis-  Engineer's 
sion  or  the  Subway  Company  shall  be  dissatisfied  with  the  deter-  determination 
mination  of  the  actual  cost  of  the  plant  and  structure  or  the 
actual  cost  of  equipment  paid  or  accrued  prior  to  the  date  of  this 
certificate  or  shall  be  dissatisfied  with  any  such  quarterly  de- 
termination or  any  item  or  items  thereof  it  shall  within  thirty 
(30)  days  after  the  receipt  of  any  such  determination  file  with 
the  Engineer  a  statement  in  writing  of  the  item  or  items  objected  Objections  to 
to  and  the  reasons  for  such  objection.  If  within  such  period  of 
thirty  (30)  days  the  Commission  or  the  Subway  Company  shall 
fail  to  file  such  statement  with  the  Engineer,  the  determination 
shall  be  final  and  conclusive  upon  the  party  so  failing.  If  such 
statement  of  objections  be  so  filed  with  respect  to  the  determina- 
tion of  the  actual  cost  of  plant  and  structure  or  the  actual  cost 
of  equipment  paid  or  accrued  prior  to  the  date  of  this  Certificate, 
the  Engineer  shall  thereupon  reconsider  such  determination,  or  Reconsidera- 
any  such  item  or  items  thereof,  so  objected  to  and  shall,  within  Engineer 
thirty  (30)  days  after  the  filing  of  such  statement,  render  a  re- 
determination  stating  his  conclusions  as  to  the  item  or  items 
so  objected  to.  If  such  statement  of  objections  be  so  filed  with 
respect  to  any  quarterly  determination  of  the  actual  cost  of  plant 
and  structure  or  actual  cost  of  equipment  paid  or  accrued  after 
the  date  of  this  certificate,  the  Engineer  shall  thereupon  recon- 
sider such  determination,  or  any  such  item  or  items  thereof,  so 
objected  to  and  shall  state  his  conclusions  thereon  in,  or  at  the 
time  of,  his  determination  for  the  quarter  year  succeeding  the 
quarter  year  for  which  the  determination  so  objected  to  was 
made.  Any  such  redetermination  shall  be  final  and  conclusive 
unless  the  Commission  or  the  Subway  Company  shall  within 
thirty  (30)  days  after  the  receipt  thereof  give  written  notice  to 
the  other  that  it  requires  the  same  to  be  submitted  to  arbitration  Arbitration  of 
or  the  court  as  hereinafter  provided.  In  the  case  of  additions, 
the  Engineer  shall,  in  the  same  manner  and  subject  to  the  same 

21 


Dates  of 
operation  of 
additions 


Inclusion  of 
expenditures 
conditional 


COMPENSATION 

review  as  is  provided  in  the  case  of  determinations  as  to  cost,  de- 
termine the  respective  dates  at  which  additions  are  put  into 
operation.  Any  period  of  time  specified  in  this  paragraph  may  be 
extended  with  the  written  consent  of  the  Commission  and  the 
Subway  Company. 

No  expenditure  made  by  the  Subway  Company  in  or  about 
the  acquisition  or  construction  of  the  plant  and  property  of  any 
of  said  railroads  shall  be  included  in  or  made  a  part  of  the  actual 
cost  of  plant  and  structure  or  of  equipment  thereof  for  any  pur- 
pose under  this  certificate  unless  the  detailed  plans  are  approved 
as  provided  in  Article  IV  and  the  cost  and  respective  dates  deter- 
mined as  provided  in  this  Article. 


Compensation  AS  compensation  the  Subway  Company  shall  pay  to  the  Comp- 
troller for  the  period  beginning  on  the  day  when  any  part  of 
either  of  the  Railroads  is  put  in  operation  and  ending  on  the  day 
when  the  Subway  Company  shall  cease  to  operate  the  Railroads 
in  conjunction  with  the  Subway  Railroads,  a  specified  part  or 
proportion  of  the  income  earnings  and  profits  which  shall  be  in- 
cluded in  the  compensation  provided  for  in  the  subway  contract, 
and  determined  in  accordance  with  the  provisions  of  the  subway 
contract  which,  in  respect  thereto,  are  as  follows : 

"CHAPTER  II 


Pooling  of 
receipts 


1  Revenue ' 


RENTAL 

"  ARTICLE  XLIX.  In  consideration  of  the  operation  of  the 
"  Railroad  and  the  Existing  Railroads  in  conjunction  with 
"  each  other  for  a  single  fare  and  of  the  contribution  by  the 
"  Lessee  to  or  toward  the  cost  of  construction  of  the  Railroad 
"  as  aforesaid,  upon  the  commencement  of  operation  of  Sub- 
"  divisions  I  and  II  of  the  Broadway-Fourth  Avenue  Line, 
"  the  gross  receipts  from  whatever  source  derived  directly 
"  or  indirectly  by  the  Lessee  or  on  its  behalf  in  any  man- 
"  ner  from,  out  of  or  in  connection  with  the  operation  of 
"  the  Railroad  and  the  Existing  Railroads  (hereinafter  re- 
"  f erred  to  as  the  'revenue')  shall  be  combined  during  the 
"  term  of  this  contract  and  the  City  shall  receive  for  the  use 
"  of  the  Railroad  at  the  intervals  provided  a  specified  part  or 
"  proportion  of  the  income,  earnings  and  profits  of  the  Rail- 


22 


COMPENSATION 

*'  road  and  the  Existing  Railroads.    The  amount  of  such  in- 
41  come,  earnings  and  profits  shall  be  determined  as  follows : 

"  From  the  revenue  the  Lessee  shall  at  the  end  of  each 
"  quarter  year  ending  December  31,  March  31,  June  30  and   Deductions 
"  September  30,  deduct  in  the  order  named : 

"  1  Such  rentals,  actually  and  necessarily  payable  by  the  Rentals 
"  Lessee  for  the  use  of  property  in  connection  with  the  Rail- 
"  road  and  the  Existing  Railroads,  under  contracts  or  leases 
"  approved  by  the  Commission,  as  are  not  included  in  operat- 
"  ing  expenses  as  classified  in  the  accounting  system  pre- 
"  scribed  by  the  Commission. 

"  2  Taxes,  if  any,  upon  property  actually  and  necessarily 
"  used  by  the  Lessee  in  the  operation  of  the  Railroad  and  the 
"  Existing  Railroads,  together  with  all  taxes  or  other  gov- 
"  ernmental  charges  of  every  description  (whether  on  physi-  Taxes,  etc. 
"  cal  property,  stock  or  securities,  corporate  or  other  f  ran- 
"  chises,  or  otherwise)  assessed  or  which  may  hereafter  be 
"  assessed  against  the  Lessee  in  connection  with  or  incident 
"  to  the  operation  of  the  Railroad  and  the  Existing  Rail- 
"  roads.  Also  such  assessments  for  benefits  as  are  not  prop- 
"  erly  chargeable  to  cost  of  construction  or  cost  of  equip- 
"  ment. 

"  3  All  expenses,  exclusive  of  maintenance,  actually  and   Operating 
"  necessarily  incurred  by  the  Lessee  in  the  operation  of  the 
li  Railroad  and  the  Existing  Railroads. 

"4  An  amount  equal  to  twelve  per  centum  (12%)  of 
"  the  revenue  for  the  maintenance,  exclusive  of  deprecia-  Maintenance 
"  tion,  of  'the  Railroad  and  Equipment  and  the  Existing 
"  Railroads.  Such  maintenance  shall  include  the  repair  and 
"  replacement  of  tracks  and  also  other  parts  of  continuous 
"  construction  and  parts  of  equipment  units,  but  shall  not 
"  include  the  replacement  of  any  of  the  principal  parts  of 
"  the  railroad  structure  and  equipment,  as  such  principal 
"  parts  are  from  time  to  time  specified  and  defined  by  the 
"  Commission.  If,  in  any  quarter  year,  such  maintenance 
"  shall  cost  less  than  twelve  per  centum  (12%)  of  the  reve- 
"  nue  the  unexpended  balance  shall  be  transferred  to  the 
"  depreciation  funds  provided  for  in  paragraph  5  of  this 
"  article ;  and  if,  in  any  quarter  year,  such  maintenance  shall 
"cost  more  than  such  twelve  per  centum  (12%)  of  the 
"  revenue  an  amount  equal  to  the  excess  may  be  withdrawn 
"  from  such  depreciation  funds  and  applied  to  such  main- 
"  tenance. 

23 


COMPENSATION 


Depreciation 


Classification 
into  funds 


Arbitration  of 
classification 


Three  depre- 
ciation funds 


"  5  For  the  first  year  of  temporary  operation  an  amount 
equal  to  three  per  centum  (3%)  of  the  revenue  for  depre- 
ciation of  such  portions  of  the  Railroad  and  the  Equipment 
and  the  Existing  Railroads  as  are  not  repaired  or  replaced 
through  the  expenditures  for  maintenance  provided  for  in 
paragraph  4  of  this  Article.  Prior  to  the  beginning  of  the 
temporary  operation  provided  for  in  Article  LII  the  Com- 
mission and  the  Lessee  shall  agree  upon  the  classification 
of  such  three  per  centum  (3%)  to  accord  with  its  division 
into  the  depreciation  funds  hereinafter  in  this  article  pro- 
vided for.  If  prior  to  the  beginning  of  such  temporary 
operation  the  Commission  and  the  Lessee  are  unable  to 
agree  upon  such  classification  the  same  shall  be  determined 
by  arbitration  or  by  the  court.  Within  thirty  (30)  days 
after  the  thirtieth  day  of  June  following  the  beginning  of 
such  temporary  operation  and  annually  thereafter  the  Com- 
mission and  the  Lessee  shall  determine  the  classification 
and  amount  of  depreciation,  and  excess  maintenance  not 
covered  by  the  amount  set  aside  under  paragraph  4  of  this 
Article,  during  the  preceding  fiscal  year,  and  the  deduction 
for  such  year  shall  thereupon  be  adjusted  to  conform  with 
such  determination.  If  within  such  period  the  Commission 
and  the  Lessee  are  unable  to  agree  upon  the  classification 
and  amount  of  depreciation  during  the  preceding  fiscal  year, 
the  amount  thereof  shall  thereupon  be  determined  by  arbi- 
tration or  by  the  court.  The  said  three  per  centum  (3%) 
for  the  first  year  of  such  temporary  operation  and  the 
amount  determined  as  hereinbefore  provided  for  future 
years  shall  be  diAaded  in  accordance  with  such  classification 
and  paid  into  three  (3)  depreciation  funds.  The  first  of 
such  funds  shall  be  known  as  the  'Depreciation  Fund  for 
the  Railroad  and  Equipment,'  the  second  of  such  funds 
shall  be  known  as  the  'Depreciation  Fund  for  the  Plant 
and  Property  of  the  Extensions  and  Additional  Tracks,' 
which  shall  be  the  plant  and  property  of  the  extensions 
and  additional  tracks  authorized  by  the  Commission  by 
said  certificates,  and  the  third  of  such  funds  shall  be  known 
as  the  'Depreciation  Fund  for  Existing  Railroads'  which 
shall  be  the  Existing  Railroads  and  equipment  thereof  other 
than  that  covered  by  the  second  fund  hereinbefore  in  this 
article  provided  for.  If  necessary  the  maintenance  fund 
provided  for  in  paragraph  4  shall  be  similarly  divided  in 
accordance  with  the  same  procedure  as  hereinbefore  out- 


24 


COMPENSATION 

"  lined  for  the  depreciation  funds.  Such  funds  shall  be 
"  further  divided  from  time  to  time  as  may  be  necessary. 
"  Such  funds  shall  be  in  charge  of  and  under  the  control  and 
"  direction  of  the  Depreciation  Fund  Board.  The  cost  of 
"all  replacements  of  the  principal  parts  (as  such  principal  TO  cover 

.-.,  1      i    /-        j    i_         i         replacements  of 

'  parts  are  trom  time  to  time  specified  and  denned  by  the   principai  parts, 
"  Commission)   of  the  Railroad  and  Equipment  and  of  the   etc- 
"  Existing  Railroads  due  either  to  wear  and  tear  or  to  obso- 
"  lescence,  inadequacy  or  age,  and  also  any  excess  in  the  cost 
'*  of  maintenance  as  provided  in  paragraph  4  of  this  article 
"  shall  be  paid  from  the  appropriate  fund.    When  any  prin-   Payments 
"  cipaL  part  of  the  Railroad  or  Equipment  or  of  the  Existing  f 
"  Railroads  is  retired  or  withdrawn  from  service,  an  amount 
''  equal  to  its  cost  shall  be  withdrawn  from  the  appropriate 
"  fund  and  expended  on  new  construction  or  new  equipment. 
"  Any  salvage  or  proceeds  on  parts  so  retired  or  withdrawn   Salvage,  etc. 
"  shall  (subject  to  the  provisions  of  any  now  existing  mort- 
"  gage  or  mortgages  covering  the  parts  so  retired  or  with- 
"  drawn)  be  paid  into  the  appropriate  fund.     Any  amounts 
"  in  such  funds  not  currently  needed  for  the  purposes  herein 
"  specified  shall  be  securely  invested  and  reinvested  by  the 
"  Depreciation  Fund  Board  and  all  interest  and  profits  ac-   interest 
"  cruing  thereon  shall  be  returned  to  the  revenue.    The  De- 
"  preciation  Fund  Board  shall  have  the  right  to  sell  invest- 
"  ments  to  meet  current  needs  and   for  purposes  of  rein- 
"  vestment.     A   permanent   record   of   the   depreciation   of   Records 
"  each  class  of  construction  and  equipment  of  the  Railroad 
"  and  the  Existing  Railroads  (as  such  classes  are  from  time 
"  to  time  defined  or  specified  by  the  Commission)   shall  be 
"  kept  by  the  Lessee  in  the  form  prescribed  from  time  to 
"time  by  the  Commission.     At  the  expiration  of  the  term  uponexpira- 
"  of  the  Lease,  or  upon  earlier  termination  as  hereinafter   ter 
"  provided,  any  amount  in  the  Depreciation  Fund  for  the 
"  Railroad  and  Equipment  shall  be  paid  to  the  City  or  to  a 
"  new  lessee  as  may  be  directed  by  the  Commission  and  any 
"  amounts    in   the-  Depreciation    Fund    for   the    Plant    and 
"  Property  of  Extensions  and  Additional  Tracks  and  in  the 
"  Depreciation  Fund  for  Existing  Railroads  shall  be  paid  to 
"  the  Lessee.     In  case  the  City  shall  terminate  the  contract  as 
*'  to  a  specified  portion  or  portions  of  the  Railroad  as  herein- 
"  after  provided,  the  Commission  and  the  Lessee  shall  de- 
"  termine  what  proportion  of  the  first  of  such  funds  shall 
"  then  be  paid  over  to  the  City  or  to  a  new  lessee  on  account 

25 


COMPENSATION 


Existing 
income 


6%  on  Lessee's 
contribution 
and  cost  of 
equipment 


of  depreciation  of  the  specified  portion  (including  the 
Equipment  thereof)  as  to  which  the  contract  is  so  termi- 
nated and  in  case  of  their  failure  to  agree  upon  such 
amount  the  same  shall  be  determined  by  arbitration  or  by 
the  court. 

"6  One-quarter  (J4)  of  the  sum  of  three  million  five 
hundred  thousand  dollars  ($3,500,000)  to  be  retained  by 
the  Lessee  for  each  quarter  year  of  the  term  of  the  Lease 
as  representing  the  average  annual  income  from  the  opera- 
tion of  the  Existing  Railroads  during  the  two  years  prior 
to  the  date  of  the  beginning  of  initial  operation,  out  of 
which  the  Lessee  shall  pay  interest  charges  on  obligations 
representing  capital  investment  (preceding  the  date  of  this 
contract)  in  the  Existing  Railroads. 

"  7  One-quarter  ( /4 )  of  an  amount  equal  to  six  per  cen- 
tum (6%)  of  (1)  the  Lessee's  contribution  toward  the 
cost  of  construction  of  the  Railroad,  (2)  the  cost  of  equip- 
ment of  the  Railroad  for  initial  operation,  (3)  the  actual 
cost  of  the  plant  and  property  of  the  extensions  and  ad- 
ditional tracks  authorized  by  the  Commission  by  said  cer- 
tificates, and  (4)  the  cost  of  Reconstruction  of  the  Exist- 
ing Railroads  for  Initial  Operation,  for  each  quarter  year 
of  the  term  of  the  Lease,  out  of  which  the  Lessee  shall 
set  aside  amounts  sufficient,  with  interest  and  accretions 
thereon,  to  amortize  within  the  term  of  the  Lease  such 
contribution  and  such  costs.  Such  payments  (subject  to 
the  reduction  of  the  cost  of  construction  as  hereinafter 
provided)  shall  continue  to  be  made  to  the  Lessee  for 
each  quarter  year  of  the  term  of  the  Lease  irrespective  of 
whether  any  part  of  the  cost  has  been  amortized  or  the 
bonds  issued  therefor  retired.  In  the  event  of  the  tempo- 
rary operation  of  the  Railroad  or  the  commencement  of 
the  term  of  the  Lease  prior  to  the  completion  of  the  Rail- 
road, such  one-quarter  of  six  per  centum  (}4  of  6%) 
shall  be  computed  upon  the  basis  of  the  portion  of  the 
Lessee's  contribution  toward  the  cost  of  construction  of 
the  Railroad,  of  the  portion  of  the  cost  of  equipment  of 
the  Railroad  for  initial  operation,  of  the  portion  of  the 
actual  cost  of  the  plant  and  property  of  such  extensions  and 
additional  tracks  and  of  the  cost  of  Reconstruction  of  the 
Existing  Railroads  for  Initial  Operation  then  in  operation. 
The  Lessee  shall,  however,  reduce  the  cost  of  construction 
borne  by  it  and  the  cost  of  equipment  by  the  sum  of  One 


COMPENSATION 

"  Million  Three  Hundred  and  Thirty  Thousand  Dollars 
"  ($1,330,000).  Such  reduction  shall  be  apportioned  among 
"  (a)  the  Lessee's  contribution  toward  the  cost  of  construc- 
"  tion  of  the  Railroad,  (b)  the  cost  of  equipment  of  the 
"  Railroad  for  initial  operation,  (c)  the  cost  of  Reconstruc- 
"  tion  of  the  Existing  Railroads  for  Initial  Operation  and 
"  (d)  the  actual  cost  of  the  plant  and  property  of  the  ex- 
"  tensions  and  additional  tracks  (exclusive  of  additions) 
"  authorized  by  said  certificates  in  the  proportion  that  the 
"  cost  of  each  thereof  bears  to  the  cost  to  the  Lessee  of  the 
"  whole.  Such  reduction  shall  bear  interest  in  the  same 
"  amount  as  is  paid  thereon  from  and  after  the  beginning  of 
"  initial  operation  under  the  provisions  of  this  paragraph 
"  and  the  amount  of  such  interest  when  paid  shall  be  paid 
"  into  the  revenue.  Such  reduction  (together  with  the  said 
"  interest  thereon)  shall  be  accomplished  by  the  Lessee  ap- 
"  plying  thereto  the  first  sums  coming  to  it  under  the  pro- 
"  visions  of  Article  L  on  account  of  its  fifty  per  centum 
"  (50%)  of  the  income,  earnings  and  profits  of  the  Rail- 
"  road  and  the  Existing  Railroads,  provided,  however,  that 
"  the  Lessee  shall  not  be  required  to  pay  from  its  share  of 
"  such  income,  earnings  and  profits  in  any  one  year  an 
"  amount  in  excess  of  one-fifteenth  thereof. 

"  8  When  the  Lessee  shall  provide  Additional  Equip-  TO  the  Lessee 
"  ment  for  the  Railroad  (that  is,  Equipment  in  addition  to 
"  that  provided  for  initial  operation  as  indicated  by  the 
"  schedules  filed  as  provided  in  Article  XL,  except  Additional 
"  Equipment  belonging  to  the  Extensions,  unless  the  Exten- 
"  sions  to  which  such  Additional  Equipment  belongs  shall 
"  become  a  part  of  the  Railroad,  as  provided  in  Article 
"  LXXII,  in  which  event  the  sinking  funds  provided  for 
"  such  Additional  Equipment  shall  be  combined  with  the 
"  funds  provided  for  in  this  paragraph  but  the  said  sinking 
"  funds  may  continue  to  be  separately  identified  on  the  books 
"of  the  Lessee),  or  Additions  to  the  Existing  Railroads, 
"  then  an  amount  to  be  retained  by  the  Lessee  equal  to  one- 
"  quarter  (%)  of  the  annual  interest  payable  by  the  Lessee. 
"  (or,  in  the  event  that  the  Lessee  should  not  borrow  money 
"  for  such  purpose,  then  an  amount  equal  to  one-quarter 
(/4)  of  the  interest  at  the  average  annual  rate  payable  by 
"  the  Lessee  on  long  term  securities  issued  by  it  for  the 
"  purpose  of  carrying  out  its  obligations  under  this  contract) 
"  upon  the  cost  of  each  additional  unit  (as  the  words  'ad- 

27 


COMPENSATION 


To  the  City  on 
its  share  of  cost 
of  construction 


To  City  on  its 
share  of  Addi- 
tions  to   con- 
struction 


"  ditional  unit'  are  defined  in  Article  LXIX),  together  with 
"  a  sr.m  equal  to  one-quarter  of  one  per  centum  (j4  of  1%) 
"  of  the  cost  of  each  additional  unit,  which  latter  amount 
"  shall  be  paid  into  a  separate  sinking  fund  which  with  in- 
'•  terest  and  accretions  shall  be  promptly  and  securely  in- 
"  vested  and  reinvested  by  it  for  the  amortization  of  the  cost 
"  of  such  additional  unit.  Upon  the  completion  of  the  amor- 
"  tization  of  the  cost  of  any  additional  unit  the  payments 
"  provided  for  in  this  paragraph  in  respect  of  such  additional 
"  unit  shall  cease  and  any  balance  in  the  sinking  fund  of  any 
"  amounts,  or  interest  or  accretions  thereon,  set  aside  for 
"  the  amortization  of  the  cost  of  such  additional  unit  shall  be 
"  paid  into  the  revenue. 

"  9  An  amount'  to  be  paid  to  the  City  for  each  quarter 
"  year  of  the  term  of  the  Lease  equal  to  one-quarter  ( *4 ) 
"  of  the  annual  interest  payable  by  the  City  (or,  in  the 
"event  that  any  portion  of  the  cost  of  construction  borne 
"  by  the  City  should  be  met  other  than  by  the  issuance  of 
"  corporate  stock  or  other  long  term  interest  bearing  securi- 
"  ties,  then  an  amount  equal  to  one-quarter  (^)  of  the 
"  interest  at  the  annual  rate  specified  in  the  last  then  preced- 
"  ing  sale  by  the  City  of  corporate  stock  or  other  long  term 
"  interest  bearing  securities)  upon  its  share  of  the  cost  of 
"  construction  of  the  Railroad  (exclusive  of  Additions)  to- 
"  gether  with  an  amount  equal  to  one-quarter  of  one  per 
"  centum  (*4  of  1%)  of  the  City's  share  of  the  cost  of  con- 
"  struction  of  the  Railroad  (exclusive  of  Additions).  Such 
"  payments  shall  continue  to  be  made  to  the  City  for  each 
"  quarter  year  of  the  term  of  the  Lease  irrespective  of 
"  whether  any  part  of  such  share  of  the  cost  of  construc- 
"  tion  has  been  amortized  or  the  bonds  issued  therefor  re- 
"  tired. 

"  10  An  amount  to  be  paid  to  the .  City  equal  to  one- 
"  quarter  (J4)  of  the  annual  interest  actually  payable  by 
"  the  City  (or,  in  the  event  that  any  portion  of  the  cost  of 
"  construction  borne  by  the  City  should  be  met  other  than 
<;by  the  issuance  of  corporate  stock  or  other  long  term 
"  interest  bearing  securities,  then  an  amount  equal  to  one- 
"  quarter  (%)  of  the  interest  at  the  annual  rate  specified  in 
"  the  last  then  preceding  sale  by  the  City  of  corporate  stock 
"  or  other  long  term  interest  bearing  securities)  upon  the 
"  cost  of  construction  of  each  additional  unit  of  Additions 
"  to  the  Railroad,  together  with  an  amount  equal  to  one- 


28 


COMPENSATION 

"quarter  of  one  per  centum  (l/^  of  \%)  of  the  cost  of 
"construction  of  each  additional  unit  of  Additions  to  the 
"  Railroad  to  furnish  a  sinking  fund  for  the  amortization  of 
"  the  cost  of  construction  of  such  additional  unit.  Upon  the 
"  completion  of  the  amortization  of  the  cost  of  any  additional 
"  unit  the  payments  provided  for  in  this  paragraph  in  respect 
"  of  such  additional  unit  shall  cease  and  any  balance  in  the 
"  sinking  fund  of  any  amounts,  or  interest  or  accretions 
"  thereon,  set  aside  for  the  amortization  of  the  cost  of  con- 
"  struction  of  such  additional  unit  shall  be  paid  into  the 
"  revenue. 

"11  One  per  centum  (1%)  of  the  revenue,  which  shall  Contingent 
"  be  paid  into  a  separate  fund  to  be  in  the  charge  and  under  reserve  fund 
"  the  direction  and  control  of  the  Depreciation  Fund  Board 
"  and  which  with  interest  and  accretions  shall  be  securely 
"  invested  and  reinvested  by  it  to  provide  a  contingent  re- 
"  serve  fund.  When  any  such  fund  with  interest  and  accre- 
tions shall  equal  one  (1%)  per  centum  of  the  cost  of 
"  construction  and  the  cost  of  equipment  of  the  Railroad  or 
"  of  the  portion  thereof  remaining  in  operation,  payments 
"  to  such  fund  shall  be  suspended  and  interest  thereon  shall 
"  be  paid  into  the  revenue.  If  thereafter  such  fund  shall 
"fall  below  such  one  (1%)  per  centum,  payments  at  the 
"  rate  aforesaid  shall  be  resumed  until  the  fund  with  in- 
"  terest  and  accretions  again  equals  such  one  (  1  %  )  per  cen- 
"  turn.  Such  fund  shall  be  used  to  meet  deficits  in  opera- 
"  tion  and  the  payment  of  the  various  obligations  and  de- 
"  ductions  hereinbefore  in  this  Article  referred  to  and  for 
"  such  other  purposes  as  may  from  time  to  time  be  approved 
"  by  the  Commission.  At  the  end  of  the  term,  or  sooner 
"  termination  thereof,  any  balance  in  this  fund,  after  the 
"  payment  of  any  claims  against  the  Lessee  arising  out  of 
"  operation,  shall  be  paid  into  the  revenue. 

"  12  The  amount  remaining  after  making  all  such  deduc-  income,  eam- 
"  tions  shall  be  deemed  to  be  the  income,  earnings  and  profits 
"  of  the  Railroad  and  the  Existing  Railroads. 


"  ARTICLE  L.     Of  the  income,  earnings  and  profits  of  Division  of 
"the  Railroad   and  the  Existing  Railroads  fifty    (50)    per 
"  centum  shall  be  paid  to  the  City  and  the  remaining  fifty 
"  (50)  per  centum  shall  be  retained  by  the  Lessee. 

"  ARTICLE  LI.     If  in  any  quarter  year  the  revenue  shall  Deficits 
"  be  insufficient  to  meet  the  various  obligations  and  deduc-  cumulative 

29 


s 


COMPENSATION 


Temporary 
rental 


Termination  of 

temporary 

rental 


"  tions  referred  to  in  Article  XLIX,  the  deficits  shall  be 
"  cumulative  and  payments  of  such  deficits  shall  be  there- 
"  after  made  in  full  before  deducting  the  amounts  required 
"  in  the  paragraph  of  such  article,  succeeding  the  paragraph 
"  providing  for  the  payment  of  the  obligation  or  deduction 
"  as  to  which  there  has  been  such  deficit. 

"  ARTICLE  LII.  When  and  as  the  Commission  shall  de- 
"  clare  parts  of  the  Railroad  to  be  ready  for  equipment  the 
"  Lessee  shall  forthwith  equip  the  same  and  when  declared 
"  by  the  Commission  to  be  ready  for  operation  the  Lessee 
"  shall  forthwith  commence  the  operation  of  such  part  or 
"  parts  in  connection  with  the  Existing  Railroads,  including 
"  such  part  or  parts  of  the  extensions  and  additional  tracks 
"  authorized  by  said  certificates  as  may  have  been  com- 
"  pleted  and  may  be  ready  for  operation.  The  earnings  of 
"  such  part  or  parts  shall  be  combined  with  those  of  the 
"  Existing  Railroads  and  the  revenue  shall  be  distributed  as 
"  provided  in  Articles  XLIX,  L  and  LI,  except  that  the 
"  deductions  provided  for  in  paragraphs  7  and  9  of  Article 
"  XLIX  shall  be  computed  on  the  basis  of  the  cost  of  con- 
"  struction  and  the  cost  of  equipment  of  such  part  or  parts 
"  of  the  Railroad  and  such  part  or  parts  of  the  plant  and 
"  property  of  the  extensions  and  additional  tracks  author- 
"  ized  by  said  certificates  and  such  part  or  parts  of  the 
"  Reconstruction  of  the  Existing  Railroads  for  Initial  Opera- 
"  tion  as  are  placed  in  operation  and  except  further  that 
"  any  deficit  in  the  payments  required  to  be  made  to  the  City 
"  instead  of  being  cumulative  shall  be  added  to  the  cost  of 
"  construction  of  the  Railroad. 

"  Provided,  however,  that  if  the  term  of  the  Lease  shall 
"not  begin  on.  the  first  day  of  January,  1917,  as  provided 
"  in  Article  XLVIII  the  Lessee  shall  have  the  right  upon 
"  giving  thirty  (30)  days'  notice  in  writing  to  the  Commis- 
"  sion  to  terminate  the  arrangement  hereinbefore  in  this 
"  article  provided  in  respect  of  temporary  rental.  In  case 
"  of  such  notice  being  given  the  arrangement  hereinbefore  in 
"  this  article  provided  for  in  respect  of  temporary  rental 
"  shall  on  the  expiration  of  such  thirty  (30)  days  cease  and 
"  the  City  shall  thereafter  receive  as  compensation  for  the 
"  use  of  such  part  or  parts  of  the  Railroad  and  such  part 
"  or  parts  of  the  said  extensions  and  additional  tracks  as 
"  shall  have  been  declared  completed  and  ready  for  opera- 


30 


COMPENSATION 

"  tion  under  the  provisions  of  this  article  either  a  specified 
"  sum  of  money  or  a  specified  part  or  proportion  of  income, 
"  earnings  or  profits  of  such  part  or  parts  of  the  Railroad 
"  and  such  part  or  parts  of  the  said  extensions  and  addi- 
"  tional  tracks  or  both  a  sum  of  money  and  a  part  or  propor- 
"  tion  of  the  income,  earnings  or  profits  of  said  part  or  parts 
"  of  the  Railroad  and  such  part  or  parts  of  the  said  exten- 
"  sions  and  additional  tracks  as  shall  be  agreed  upon  by  the 
"  Commission  (with  the  approval  of  the  Board  of  Estimate) 
"  and  the  Lessee  or  if  the  Commission  (with  such  approval) 
"  and  the  Lessee  are  unable  to  agree  thereon  within  thirty 
"  (30)  days  after  such  notice  takes  effect  as  hereinbefore 
"  provided  such  compensation  shall  be  determined  by  arbi- 
"  tration  or  by  the  court. 

"  ARTICLE  LIII.  The  funds  provided  for  in  paragraphs  Depreciation 
"  5  and  11  of  Article  XLIX  and  the  depreciation  funds  pro-  Fund  Board 
"  vided  for  in  paragraph  1  of  Article  LXX  shall  be  in  the 
"  charge  of  and  under  the  control  and  direction  of  a  Board 
"  to  be  known  as  the  Depreciation  Fund  Board  and  to  be 
"  organized  and  constituted  as  follows :  Before  the  begin- 
"  ning  of  operation  of  any  part  of  the  Railroad  the  Com- 
"  mission  and  the  Lessee  shall  each  name  an  individual  to  HOW  organized 
"  be  a  member  of  such  board.  Within  thirty  (30)  days 
"  thereafter  the  Commission  and  the  Lessee  shall  agree  upon 
"  the  third  member  of  such  board  or  in  the  event  of  their 
"  failure  to  so  agree  within  such  time,  the  third  member 
"  upon  the  application  either  of  the  Commission  or  of  the 
"  Lessee  shall  be  nominated  by  the  Chief  Judge  of  the  Court 
"  of  Appeals  of  the  State  of  New  York ;  or  if  within  fifteen 
"  (15)  days  after  being  requested  by  either  the  Commission 
"  or  the  Lessee  to  make  such  nomination,  the  said  Chief 
"  Judge  shall  decline  or  fail  to  make  a  nomination,  then  the 
"  third  member  shall  be  nominated  upon  the  request  of  either 
"  the  Commission  or  the  Lessee  and  within  a  period  of 
"  fifteen  (15)  days  by  any  Associate  Judge  of  the  said  Court 
"  of  Appeals  in  the  order  of  seniority.  In  the  event  of  a 
"  vacancy  in  the  office  of  any  of  the  members  of  the  board 
"  the  successor  shall  be  chosen  in  the  same  manner  as  above 
44  provided  in  case  of  the  original  nomination.  Such  Depre-  Duties 
"  ciation  Fund  Board  shall  administer  the  funds  provided 
"  for  in  the  paragraphs  of  Articles  XLIX  and  LXX  re- 
"  ferred  to  and  the  members  thereof  shall  receive  as  com- 

31 


COMPENSATION 


Expenses 


"  pensation  for  their  services  such  amount  and  shall  be  ap- 
'v  pointed  for  such  period  as  may  from  time  to  time  be 
"  agreed  upon  by  the  Commission  and  the  Lessee  and  such 
"  amount  shall  be  included  as  part  of  the  operating  expenses 
"  referred  to  in  paragraph  3  of  Article  XLIX.  The  Lessee 
"  shall  also  pay  and  include  as  part  of  such  operating  ex- 
"  penses  the  actual  and  necessary  expenses  of  such  Depreci- 
"  ation  Fund  Board  including  clerical  and  office  expenses. 


In  case  termi- 
nations involve 
readjustments 


Payments — 
when  to  be 
made 


To  be  made  to 
Comptroller 


Statement  of 
receipts  and 
disbursements 


"  ARTICLE  LVII.  In  case  of  the  termination  of  this  con- 
"  tract  separately  as  to  any  of  the  Lines  of  the  Railroad  (or 
"  of  Extensions  which  become  part  of  the  Railroad  for  pur- 
"  poses  of  rental  as  provided  in  Article  LXXII)  and  in  case 
"  such  terminations  do  not  involve  a  readjustment  of  the 
"  rental  as  provided  in  Article  LXXIX,  the  deductions  from 
"  revenue  provided  in  Article  XLIX  shall  continue  to  be 
"  made  as  to  the  Line  or  Lines  (or  as  to  such  Extensions) 
"  and  the  Additions  thereto,  remaining  after  such  termina- 
"  tion,  but  the  deductions  provided  for  in  paragraphs  7,  8, 
"9,  10  and  11  of  Article  XLIX  shall  then  be  made  upon 
"  the  basis  of  the  cost  of  construction  and  the  cost  of  equip- 
"  ment  remaining  after  apportioning  such  cost  of  construc- 
"  tion  and  cost  of  equipment  between  the  several  Lines  of 
"  the  Railroad  as  provided  in  Article  LXXV." 

All  payments  to  be  made  to  the  City  shall  be  made  on  or 
before  the  30th  days  of  January,  April,  July  and  October  in 
each  year  during  the  term  of  the  authorizations  or  licenses  hereby 
given.  Receipts  and  interest  and  accruals  shall  be  pro-rated 
and  if  necessary  adjusted  in  the  payments  for  the  quarter  year 
succeeding  the  quarter  in  which  they  are  actually  paid.  Any 
other  adjustment  of  payments  or  deductions  that  is  necessary 
shall  be  made  (for  the  whole  of  the  year  preceding)  as  of  the 
end  of  the  fiscal  year. 

The  amount  payable  to  the  City  shall  be  paid  to  the  Comp- 
troller at  the  time  specified  in  the  last  preceding  paragraph  and 
the  Subway  Company  shall,  if  the  compensation  to  be  paid  for 
the  Railroads  shall  be  a  portion  or  percentage  of  income,  earn- 
ings or  profits,  deliver  to  the  Commission  and  to  the  Comptroller 
at  the  time  of  each  payment  a  statement  in  the  form  and  with 
details  to  be  prescribed  by  the  Commission  showing  the  receipts 
and  disbursements  of  the  Subway  Company  for  the  preceding 


32 


COMPENSATION 

quarter.  Such  statement  shall  be  verified  under  oath  by  the 
officer  of  the  Subway  Company  having  charge  of  the  books  and 
accounts  of  the  Subway  Company,  or,  in  case  of  his  absence  or 
inability,  then  by  its  President  or  other  chief  officer  or  manager. 

The  Comptroller  and  the  Commission  shall  have  the  right  to  Right  of 
verify  any  of  the  said  statements  by  an  examination  of  the  Sub- 
way Company's  and  any  of  the  sub-contractor's  books,  records 
and  memoranda  and  the  examination  under  oath  of  any  of  its 
officers  or  servants;  and  the  Subway  Company  hereby  covenants 
that  it  will  require  its  officers  and  servants  to  submit  to  such 
examination  and  produce  such  books,  records  and  memoranda 
whenever  and  wherever  they  may  be  required  by  the  Commis- 
sion or  the  Comptroller. 

In  case  the  City  shall  terminate  the  Subway  Contract  as  to  Prior  termina- 
the  Broad  way- Fourth  Avenue  Line,  as  therein  described,  in  ad-  tlon  as  to  part 
vance  of  terminating  it  as  to  the  entire  Subway  Railroads,  or  in 
advance  of  terminating  it  as  to  either  the  Railroads  or  the  ad- 
ditional tracks  authorized  by  certificate  bearing  even  date  here- 
with, the  rental  of  the  Line  or  Lines  or  Extensions  of  the  Sub- 
way Railroads  remaining  after  such  termination  and  the  Rail- 
roads and  such  additional  tracks  shall  upon  demand  of  either  the 
Commission  or  the  Subway  Company  by  written  notice  delivered 
to  the  other  at  least  six  months  in  advance  of  the  time,  when 
under  the  notice  provided  for,  the  termination  shall  take  effect, 
be  readjusted.  The  amount  of  such  rental  for  the  remaining 
Line  or  Lines  or  Extensions  of  the  Subway  Railroads  and  for 
the  Railroads  and  additional  tracks  shall  be  reasonable  and  if 
not  agreed  upon  by  the  Commission,  with  the  approval  of  the 
Board  of  Estimate,  and  the  Subway  Company,  within  three 
months  from  the  date  of  the  receipt  of  such  notice  requiring 
readjustment,  the  amount  of  the  rental  for  the  Line  or  Lines  or  Readjustment 
Extensions  of  the  Subway  Railroads  remaining  after  such  termi-  of  rental 
nation  takes  effect  and  the  rental  for  the  Railroads  and  said 
additional  tracks  shall  be  determined  by  arbitration  or  by  the 
court.  If  such  rental  shall  not  be  determined  prior  to  the  time 
when  such  termination  takes  effect  the  rental  for  the  remaining 
Line  or  Lines  or  Extensions  of  the  Subway  Railroads  and  for 
the  Railroads  and  said  additional  tracks  pending  such  determi- 
nation shall  be  one-half  (J^)  of  the  amount  remaining  after 
making  the  deductions  provided  for  in  this  Article  from  the 
revenue  of  the  existing  railroads,  the  remaining  Line  or  Lines  or 
Extensions  of  the  Subway  Railroads  and  the  Railroads  and  said 
additional  tracks.  After  the  determination  of  the  rental  such 

33 


COMPENSATION 


Compensation 
— when  to  be 
readjusted 


How  deter- 
mined 


If  not  agreed 
upon 


Then  arbi- 
trated 


Lien  of  City 


In  case  of 
failure 


temporary  payments  shall  be  adjusted  to  conform  thereto  with 
interest  from  the  date  when  such  termination  takes  effect. 

The  amounts  to  be  paid  by  the  Subway  Company  as  afore- 
said shall  be  readjusted  if  and  when  the  Subway  Company  shall 
cease  to  operate  the  Railroads,  the  additional  tracks  and  the  exist- 
ing railroads  in  conjunction  with  the  Subway  Railroads  and  shall 
thereafter  be  readjusted  at  intervals  of  twenty  years.  The  annual 
amounts  to  be  paid  by  the  Subway  Company  for  each  and  every 
period  of  twenty  years  after  the  period  herein  provided  for  shall 
be  determined  as  follows,  to  wit:  Each  such  determination  shall 
be  had  upon  the  application  of  either  the  Subway  Company  or 
the  Commission.  Such  application  shall  be  made  at  any  time 
not  earlier  than  two  years  and  not  later  than  one  year  before  the 
expiration  of  each  successive  period.  If  the  Subway  Company 
and  the  Commission  shall  agree  upon  the  compensation  to  be 
paid  for  the  ensuing  period,  their  determination  shall  be  ex- 
pressed in  writing,  and  when  approved  by  the  Board  of  Estimate 
shall  be  binding  upon  both  parties.  If  the  Subway  Company 
and  the  Commission  shall  not  reach  an  agreement,  or  if  the 
Board  of  Estimate  shall  not  approve  such  agreement,  on  or  before 
a  date  one  year  prior  to  the  expiration  of  any  period  as  to  the 
compensation  to  be  paid  for  the  ensuing  period,  then  the  annual 
rate  of  compensation  for  such  succeeding  twenty  years'  period 
shall  be  reasonable;  and  the  Commission  and  the  Subway  Com- 
pany shall  be  bound,  upon  the  request  of  either,  to  submit  the 
determination  of  such  rate  of  compensation  to  arbitration,  or  to 
the  Court,  as  provided  in  Article  XIII  hereof.  If  in  any  case 
the  annual  rate  for  a  succeeding  period  shall  not  be  fixed  prior 
to  the  commencement  of  the  said  period,  the  Subway  Company 
shall  pay  the  same  rental  as  for  the  preceding  period  until  such 
time  as  the  new  rental  shall  be  determined;  and  upon  the  de- 
termination of  the  new  rental  the  difference  between  the  old  and 
the  new  rate  shall  be  adjusted  and  paid  between  the  parties. 

The  City  shall  have  a  lien  upon  the  authorizations  or  licenses 
hereby  granted  and  upon  the  plant  and  structure  erected  there- 
under of  the  Subway  Company,  to  secure  the  payment  of  such 
compensation. 

In  case  of  any  failure  to  make  such  payment  as  herein  pre- 
scribed, the  lien  aforesaid  may  be  enforced  by  the  Commission 
by  foreclosure  or  other  proper  proceeding  and  by  sale  of  such 
authorizations  or  licenses  and  property. 


34 


TERMINATION   PURSUANT  TO   NOTICE 

The  Commission  may,  in  its  own  name  or  in  the  name  and   commission 
behalf  of  the  City,  bring  action  for  specific  performance  or  by  ™*^ri"*.t  or 
mandamus  or  injunction  or  otherwise  compel  the  performance  by  proceeding 
the   Subway   Company   of  the  duties  and   obligations  imposed 
upon  it  under  the  terms  of  this  certificate.    And  the  Commission 
may,  in  behalf  or  in  the  name  of  the  City,  bring  any  action  or 
proceeding  to  enforce  the  said  lien  of  the  City,  or  to  enforce  any 
provision  of  this  certificate  in  the  manner  provided  by  Section  9 
of  the  Rapid  Transit  Act  or  any  other  proper  action  or  pro- 
ceeding. 

XI 

The  authorizations  or  licenses  hereby  given  for  the  Jamaica  City  may  ter- 
Line  and  the  Liberty  Avenue  Line  are  separate  grants,  and  the  ™^*™tllOT~ 
City,  acting  by  the  Commission  or  by  such  other  board  or  boards  cense 
as  may  be  thereunto  empowered,  may  terminate  any  such  authori- 
zation or  license  and  may  purchase  and  take  the  plant  and  prop- 
erty as  hereinbefore  defined  of  such  line  or  lines  for  which  the 
authorization  or  license  is  so  terminated  at  any  time  after  the 
expiration  of  ten  years  from  the  date  when  operation  of  any  After  ten  years 
part  of  the  line  for  which  the  authorization  or  license  is  so  termi- 
nated shall  actually  begin.     In  case  it  is  determined  to  so  ter- 
minate any  or  all  of  the  authorizations  or  licenses  hereby  granted 
as  hereinbefore  provided,  at  least  one  year's  notice  thereof  in   Notice 
writing  shall  be  given  to  the  Subway  Company. 

Such  right  of  termination  shall,  however,  be  upon  condition  Condition  of 
that  the  City  shall  pay  an  amount  for  said  plant  and  property  termination 
as  property  excluding  any  value  for  the  authorization  or  license 
hereby  granted,  to  be  determined  as  follows : 

Upon  termination  as  hereinbefore  provided  of  the  authoriza-   City  shall  pay 
tion  or  license  of  either  of  the  Railroads  the  City  shall  pay  as  to 
the  same,  as  follows: 

(1)  For  the  plant  and  property  thereof  (other  than  additions  for  plant  and 
as  hereinbefore  defined)  the  percentage  of  the  actual  cost  of  the  property 
plant  and  property  (other  than  additions)  indicated  in  the  follow- 
ing schedule: 


35 


TERMINATION    PURSUANT  TO    NOTICE 


SCHEDULE 


Price  schedule 
for  plant  and 
property 


If  terminated  at 


Percentage  to 

be  paid  by 

City 


10  years 115 

11  "  74/75ths  of  115 

12  "  73/75ths  of  115 

13  "  72/75ths  of  115 

14  "  71/75ths  of  115 

15  "  70/75ths  of  115 

16  "  69/75ths  of  115 

17  "  68/75ths  of  115 

18  "  67/75ths  of  115 

19  "  66/75ths  of  115 

20  "  65/75ths  of  115 

21  "  64/75ths  of  115 

22  "  63/75ths  of  115 

23  "  62/75ths  of  115 

24  "  61/75ths  of  115 

25  '  60/75ths  of  115 

26  '  59/75ths  of  115 

27  '  58/75ths  of  115 

28  '  57/75ths  of  115 

29  '  56/75ths  of  115 

30  '  55/75ths  of  115 

31  " 54/75ths  of  115 

32  "  53/75ths  of  115 

33  "  52/75ths  of  115 

34  "  51/75ths  of  115 

35  "  SO/7Sths  of  115 

36  "  49/75ths  of  115 

37  "  48/75ths  of  115 

38  "  47/75ths  of  115 

39  " 46/75ths  of  115 

40  '  45/75ths  of  115 

41  '  ' 44/75ths  of  115 

42  '  43/75ths  of  115 

43  '  42/75ths  of  115 

44  '  41/75ths  of  115 

45  '  40/75ths  of  115 

46  '  39/75ths  of  115 

47  '  38/75ths  of  115 

48  '  37/75ths  of  115 

49  '  »...36/75ths  of  115 

50  '  35/75ths  of  115 

51  '  34/75ths  of  115 

52  '  33/75ths  of  115 

53  *  32/75ths  of  115 

54  '  31/75ths  of  115 

55  '  30/75ths  of  115 

56  "  29/75ths  of  115 

57  "  28/75ths  of  115 

58  "  27/75ths  of  115 

59  "  26/75ths  of  115 

60  "  25/75ths  of  115 

61  " 24/75ths  of  115 

62  "  23/75ths  of  115 

63  "                              ..22/75ths  of  115 


36 


TERMINATION   PURSUANT  TO   NOTICE 


Tf  terminated  at 

Percentage  to 
be  paid  by 
City 

64  years        

.21/75ths 

of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
of  115 
0 

65 

20/75ths 

66   "    

19/75ths 

67 

18/75ths 

68   "  

17/75ths 

69 

16/75ths 

70 

15/75ths 

71 

.  .  .  14/75ths 

72   "  

13/75ths 

73 

12/75ths 

74 

ll/75ths 

75 

.  ..  10/75ths 

76 

9/75ths 

77 

.  .  8/7Sths 

78 

7/75ths 

79   "  

6/75ths 

80 

.  5/75ths 

81 

4/75ths 

82 

3/75ths 

83 

2/75ths 

84 

l/75th 

85   "  

(2)  For  additions,  as  the  word  additions  is  hereinbefore  de-  For  additions 
fined,  to  the  railroads,  or  to  either  of  the  Railroads  as  to  which, 
the  authorization  or  license  is  terminated,  the  percentage  of  the 
actual  cost  of  such  of  said  additions  as  may  have  been  completed 
or  put  in  operation  within  less  than  thirty-nine  (39)  years,  indi- 
cated in  the  schedule  following  according  to  the  age  of  each 
item  as  there  indicated : 

SCHEDULE 


Upon    termination 


If 


Percentage  to 
be  paid  by 
City 


«     J 
2  ye 

ars   ' 

105429  144 

"  3 

( 

104320  077 

"  4 

« 

! 

...                103  158  826 

"  5 

i 

.  .  .  .  ;  101.942  936 

"  6 

< 

1 

101  669  834 

«  7 

i 

99  336  830 

"  8 

< 

97.411  054 

"  9 

< 

96.479  708 

"  10 

« 

94.949  548 

"  11 

< 

I 

93.347  390 

"  12 

« 

« 

91  669  848 

37 


Price  schedule 
for  additions 


TERMINATION  PURSUANT  TO  NOTICE 


Upon  termination 


Percentage  to 

be  paid  by 

City 


If  13  years  after  provision 89.913  372 

"14  "  "  "    88.074  250 

"15  "  "  "    86.148593 

"16  '  "  " 84.132  329 

"17  '  "  "    82.021  194 

18  '  "  "    79.810  726 

19  '  "  "    77.496  249 

20  "  "    75.072  871 

21  '  "  "    72.535  467 

22  '  "  "    69.878  672 

23  '  "  "    67.096  857 

24  '  "  "    64.184  174 

25  '  "  " 61.134  429 

26  "  "  "    57.941  187 

27  "  "  "    54.597  695 

28  "  "  "    51.096  884 

29  "  "  "    47.431  351 

30  "  "  "    43.593  345 

31  "  "  "    39.574  805 

32  "  "  "    35.367  074 

33  "  "  "    30.961  415 

34  "  "  "    26.348  458 

35  "  "  "    21.518  450 

36  "  "  "    16.461  179 

37  "  "  "    11.165  951 

38  "  "  "    5.621  569 

39  "  "  "  000  000 


Basis  of  com- 
putation of 
schedule 


Reduction  of 
price 


The  above  schedule  is  computed  upon  the  basis  of  the  invest- 
ment of  the  deductions  from  the  revenue  for  amortization  in  five 
percent.  (5%)  bonds  of  the  Subway  Company  at  one  hundred 
and  seven  and  one-half  per  centum  (107^%)  and  seven  and  one- 
half  per  centum  (7l/2%)  has  been  added  to  each  outstanding 
amount  to  cover  premiums  that  may  be  payable  by  the  Subway 
Company  as  a  condition  for  calling  in  outstanding  bonds.  If  the 
amortization  funds  are  invested  at  a  more  favorable  rate  than 
that  above  assumed,  or  if  the  premiums  payable  upon  outstand- 
ing bonds  are  less  than  seven  and  one-half  per  centum  (7y2%) 
then  the  amount  to  be  paid  by  the  City  shall  be  correspondingly 
reduced. 


Amount  to  be 
deducted 


(3)  From  the  sum  of  the  percentages  so  determined  there 
shall  be  deducted  such  amount  of  money  as  shall  be  necessary  to 
put  such  plant  and  structure  in  the  condition  provided  for  by 
Article  VII  of  this  certificate,  to  be  ascertained  in  the  absence 
of  agreement  by  arbitration  or  by  the  Court  as  hereinafter  pro- 
vided in  Article  XIII. 


TERMINATION    PURSUANT  TO    NOTICE 


At  the  option  of  the  City  either  at  the  expiration  of  a  full  Transfer  may 

be  to  ne 
operator 


term  of  the  grant  or  at  the  earlier  termination  thereof,  pursuant 


to  notice  as  aforesaid,  the  Subway  Company  may  be  required  to 
transfer  the  title,  if  any,  to  and  possession  of  the  plant  and 
property  directly  to  a  new  grantee  upon  his  paying  the  amount 
to  the  Subway  Company  which  the  City  would  have  been  re- 
quired to  pay  as  aforesaid. 

In  case  the  City  itself  shall  take  over  the  plant  and  property 
such  payment  shall  be  made  by  a  City  warrant  drawn  by  the  Payment 
Comptroller,  or  otherwise,  as  may  then  be  provided  by  law.     In  How  made  by 
case  the  plant  and  property  shall  be  taken  over  directly  by  a 
new  grantee  such  payment  shall  be  made  by  a  certified  check 
upon  a  solvent  bank  or  trust  company  having  its  main  office  in  By  new 
New  York,  drawn  by  such  new  grantee,  to  the  order  of  the  Sub-  oper; 
way   Company   or   by   lawful   money   of   the  United   States   of 
America. 

If  the  amounts  to  be  paid  to  the  Subway  Company  at  the  if  amounts  not 
expiration  of  a  full  term  of  a  grant  or  upon  any  such  termination  pai< 
shall  not  have  been  finally  determined  or  paid  prior  to  or  at  the 
time  when  a  full  term  is  according  to  this  certificate  to  end  or 
the  termination  is  under  the  said  notice  given  to  take  effect,  the 
title,  if  any,  to  and  right  of  possession  of  the  plant  and  property 
of  the  lines  of  the  Railroads  shall  nevertheless  pass  to  the  City 
or  to  a  new  grantee,  free  and  clear  of  all  liens  or  other  incum- 
brances,  and  the  City  or  such  new  grantee  shall  pay  to  the  Sub- 
way Company  the  amount  so  determined  with  interest  from  the 
date  of  taking  possession,  provided,  however,  that  the  possession 
of  such  plant  and  property  shall  not  pass  to  the  City  or  to  such 
new  grantee  in  advance  of  payment  as  aforesaid  unless  the  City 
or  such  new  grantee  shall  give  to  the  Subway  Company  a  satis-  Bond  to  be 
factory  bond  or  bonds  in  an  amount  at  least  equal  to  the  differ-  given 
ence  between  the  actual  cost  of  the  plant  and  property  and  the 
amount  thereof  that  should  be  amortized  as  indicated  in  the 
schedules  contained  herein,  and  in  addition  an  amount  sufficient 
adequately  to  protect  the  Subway  Company,  which  latter  amount, 
if  not  agreed  upon  by  the  Commission  and  the  Subway  Company, 
shall  be  determined  by  arbitration  or  by  the  court. 

Upon  the  expiration  of  a  full  term  of  the  grant,  or  a  termina-  Lessee  to  exe- 
tion  by  notice  as  aforesaid,  the  Subway  Company  shall  execute       e 
and  deliver  such  instruments  as  may  be  either  necessary  or  con- 
venient to  assure  and  perfect  the  title  and  the  possession  of  the 
City  or  such  new  grantee  in  and  to  the  plant  and  property  free 
and  clear  of  all  liens  and  incumbrances  as  aforesaid. 

39 


UPON   EXPIRATION 


By  whom 
exercised 


When  pay- 
ments shall 
cease 


Valuation  of 
plant,  etc. 


The  privilege  of  termination  herein  reserved  by  the  City  may 
be  exercised  on  its  behalf  by  the  Commission,  with  the  approval 
of  the  Board  of  Estimate,  or  by  such  other  authority  represent- 
ing the  City  as  is  now  or  may  hereafter  be  vested  with  the  neces: 
sary  power.  Upon  the  exercise  of  such  privilege,  the  plant  and 
property  shall  forthwith  vest  in  the  City  or  the  new  grantee  free 
from  all  leases,  mortgages  or  other  encumbrances  whatsoever; 
and  all  right,  title  and  interest  of  the  Subway  Company  therein, 
shall  at  once  cease  and  terminate. 

In  case  the  City  shall  terminate  an  authorization  or  license 
or  a  portion  thereof  under  the  privileges  herein  reserved  all  pay- 
ments by  way  of  compensation  or  otherwise  required  to  be  made 
by  the  Subway  Company,  applicable  thereto,  except  for  damages 
for  failure  to  perform  any  covenants  herein  required  to  be  per- 
formed by  the  Subway  Company,  shall  cease  upon  the  date  of 
such  termination,  and  upon  payment  in  full  of  all  compensation 
up  to  the  date  of  such  termination,  the  Subway  Company  shall 
be  relieved  from  any  further  payment  of  compensation  in  respect 
to  such  line  or  portion  thereof  except  as  aforesaid. 

It  is  the  intention  of  the  parties  that  the  amount  to  be  paid 
for  plant  and  property  to  be  ascertained  as  hereinbefore  pro- 
vided shall  be  the  measure  of  any  payment  the  City  may  be 
called  upon  to  make  therefor,  but  in  pursuance  of  the  provisions 
of  Subdivision  1  of  Section  34  of  the  Rapid  Transit  Act,  as  it 
now  exists,  it  is  further  provided  that  if  at  any  time  in  ascer- 
taining the  amount  to  be  paid  by  the  City  as  a  condition  of  a 
termination  of  any  authorization  or  license  or  portion  thereof  as 
herein  provided  or  at  the  expiration  of  a  full  term,  it  shall  be 
necessary  that  a  valuation  of  any  plant,  property,  equipment, 
construction  or  any  investment  in  any  part  thereof  shall  be  de- 
termined, such  valuation  shall  in  default  of  agreement  be  de- 
termined by  arbitration  or  by  the  court. 


Upon  expira- 
tion all  rights 
hereunder  to 


XII 

Upon  the  expiration  of  a  full  term  of  any  authorization  or 
license  fixed  therein,  the  authorization  or  license  shall  end  and 
upon  such  termination  thereof  all  the  rights  of  property  of  the 
Subway  Company  in  the  streets,  avenues,  parkways,  highways 
and  public  places  shall  cease  and  terminate  without  compensa- 
tion, and  further,  upon  such  expiration,  the  plant  and  property, 
together  with  the  appurtenances  thereto  of  the  Subway  Company 
constructed  pursuant  to  this  certificate,  except  additions  as  here- 


40 


UPON   EXPIRATION 


inbefore  defined,  shall  become  the  property  of  the  City  without  Railroads  be- 

further  or  other  compensation  to  the  Subway  Company,  and  ad-  omty™1 
ditions  as  hereinbefore  defined  shall  be  and  become  the  property 

of  the  City  on  its  paying  to  the  Subway  Company  for  such  of  said  Citv  to  pay  f°r 

,  ..   .          J  \     J  ^  .  ....       certain  addi- 

additions  as  may  have  been  completed  or  put  in  operation  within  tions 
less  than  thirty-nine  (39)  years  the  percentage  of  the  actual  cost 
of  said  additions  indicated  in  the  schedule  following  according 
to  the  age  of  each  item  as  there  indicated. 
Such  schedule  is  as  follows: 

SCHEDULE 


Upon  expiration 


Percentage  to 
be  paid  by 
City 


Price  schedule 
for  additions 


If  on  provision i 100. 

"   1  year  after  provision ' 99.058  950 

2  years   "     "    98.073  622 

3  "    '     "    97.041  932 

4  "    '     "    95.961  699 

5  "    '     "    94.830  638 

6  "    '     "    ; 93.646  357 

7  "    '     " 92.406  354 

8  "    '     "    91.108  005 

9  "    '     "    89.748  565 

10  "  88.325  161 

11  "    '     " 86.834  782 

12  "    '     "    85.274  277 

V  13  "             83.640  346 

*  14  "    '     " 81.929535 

"15  "         "    .' 80.138  226 

"16  "             78.262  631 

"17  " 76.298  785 

"18  "         "    74.242  535 

'19  "             72.089  534 

20  "  69.835  229 

21  "  67.474  853 

22  "  65.003  416 

23  "  62.415  681 

24  "  59.706  208 

25  li  56.869  237 

26  "  53.898  779 

27 50.788  554 

28  47.531  985 

29  44.122  187 

30  40.551  949 

31 36.813  772 

32  32.899  604 

28.801  316 

34  24.510  193 

20.017  163 

36  15.312  724 

10.386  931 

38  5.229  367 

39  000  000 


ARBITRATION 


Basis  of  com- 
putation  of 
above  schedule 

Reduction  of 
price 


Amount  to  be 
deducted 


The  above  schedule  is  computed  upon  the  basis  of  the  invest- 
ment of  the  deductions  from  the  revenue  for  amortization  in 
five  per  cent.  (5%)  bonds  of  the  Subway  Company  at  one  hun- 
dred and  seven  and  one-half  per  centum  (107*/2%).  If  the 
amortization  funds  are  invested  at  a  more  favorable  rate  than 
that  above  assumed,  then  the  amount  to  be  paid  by  the  City 
shall  be  correspondingly  reduced. 

From  the  percentage  so  determined  there  shall  be  deducted 
such  amount  of  money  as  shall  be-  necessary  to  put  such  plant 
and  property  in  the  condition  provided  for  by  Article  VII  of 
this  certificate,  to  be  ascertained  in  the  absence  of  agreement  by 
arbitration  or  by  the  court  as  provided  in  Article  XIII. 


Method  of  con- 
ducting arbi- 
tration 


Appointment 
of  arbitrators 


Selection  of 
third  arbitrator 
by  agreement 


XIII 


In  case  it  shall  be  necessary  to  submit  to  arbitration  any  ques- 
tion arising  under  any  provision  of  this  certificate  in  respect  of 
which  it  is  therein  provided  an  arbitration  may  be  had,  such 
arbitration  shall  be  conducted  as  follows :  Either  the  City,  acting 
by  the  Commission,  or  the  Subway  Company  may  give  written 
notice  to  the  other  that  it  requires  the  matter  arising  hereunder 
to  be- submitted  to  arbitration,  and  shall  at  the  same  time  name 
an  arbitrator,  and  accompany  the  notice  by  a  written  acceptance 
by  the  arbitrator  of  the  nomination.  Within  thirty  (30)  days 
after  the  receipt  of  such  notice,  the  party  receiving  the  same 
shall  name  an  arbitrator,  and  give  written  notice  of  such  nomi- 
nation to  the  other  party,  the  notice  to  be  accompanied  by  a  writ- 
ten acceptance  by  the  arbitrator  of  the  nomination.  If  the  party 
to  whom  notice  of  arbitration  is  given  shall  not  so  nominate  an 
arbitrator,  who  shall  so  accept,  then  the  arbitrator  named  by  the 
party  giving  the  first  notice  shall  be  the  sole  arbitrator.  Any 
vacancy  in  the  office  of  an  arbitrator  so  nominated  shall  be  filled 
by  the  party  which  shall  have  nominated  the  last  incumbent 
thereof,  and  within  thirty  (30)  days  after  receiving  from  the 
other  party  written  notice  of  the  vacancy,  during  which  thirty 
(30)  days  the  running  of  other  periods  of  time  prescribed  for 
or  in  course  of  the  arbitration  shall  be  suspended.  If  not  so 
filled,  or  if  written  notice  of  the  nomination  be  not  given  within 
such  thirty  (30)  days,  the  remaining  arbitrator  shall  be  the  sole 
arbitrator.  The  Commission  and  the  Subway  Company  shall 
thereupon  select  a  third  arbitrator;  but  if  they  fail  to  agree  upon 
such  third  arbitrator  within  thirty  (30)  days  after  the  date  of  the 
nomination  of  the  second  arbitrator  nominated,  the  third  arbi- 


ARBITRATION 

trator  shall  be  nominated  by  the  Chief  Judge  of  the  Court  of  By  Chief  judge 

Appeals  of  the  State  of  New  York;  or  if  within  fifteen  (15)  days  ™ 

after  being  requested  by  the  Commission  or  the  Subway  Company 

to  make  such  nomination,  the  said  Chief  Judge  shall  decline  or 

fail  to  make  a  nomination,  then  an  arbitrator  shall  be  named 

upon  the  request  of  the  Commission  or  the  Subway  Company 

and  within  a  period  of  fifteen  (15)  days  by  any  Associate  Judge  fiy  Associate 

£         -J    /-  £     >  1      •         i  j  /          •      •*  TM_  if-      Judge  of  the 

of  said  Court  of  Appeals  in  the  order  of  seniority.     The  arbi-  Court  of 

trators  shall  hear  the  parties  and  their  counsel  or  any  statements  Appeals 

or  evidence  which  the  parties  or  either  of  them  desire  to  submit, 

and  may  resort  to  any  other  sources  of  information  in  reference 

to  the  question  submitted  for  determination.    Within  thirty  (30) 

days  after  the  nomination  of  the  third  arbitrator,  unless  such 

time  shall  be  extended  for  good  cause  by  written  order  of  the  Time  for 

arbitrators  or  of  a  majority  of  them,  the  arbitrators  shall  make  d 

their  determination  in  writing  in  duplicate,  one  to  be  delivered  to 

the  Commission  and  the  other  to  the  Subway  Company.     In  case  in  case  of 

any  vacancy  shall  at  any  time  occur  by  reason  of  the  death,  vacancy 

resignation  or  inability  to  serve  of  any  arbitrator,  his  successor 

shall  be  nominated  in  the  same  manner  as  above  provided  for 

the  original  nomination  of  such  arbitrator.     Any  determination   Majority 

by  a  majority  of  the  arbitrators  shall  be  final  and  conclusive.  decides 

Every  such  arbitrator  shall  be  deemed  to  be  employed  by  both 

the  City  and  the  Subway  Company.     The  fees  and  expenses  of  Fees  and 

the  arbitrators   (including  necessary  expenses  for  stenographic 

and  clerical  services)  and  the  expenses  of  the  parties  shall  be 

assessed  as  the  arbitrators  consider  equitable  and  as  they  direct 

in  their  award,  but  such  assessments  so  made  shall  not  be  charged 

to  actual  cost  of  equipment,  actual  cost  of  plant  and  structure 

or  to  operating  expenses.     Every  such  arbitrator  shall,  before 

proceeding  to  consider  the  matter,  be  sworn  as  nearly  as  may  be 

in  the  same  manner  as  the  referees  in  actions  at  law  are  required 

to  be  sworn.     Provided,  however,  that  if  in  any  case,  or  for  any  in  case  arbitra- 

reason  an  arbitration  cannot  validly  be  had  as  aforesaid,  then  £°°  cannot  be 

the  City  or  the  Subway  Company,  if  in  no  way  responsible  for 

the  failure  of  the  arbitration,  may  bring  such  action  or  suit  or 

proceeding  as  either  of  them  may  be  advised  for  the  purpose  of 

determining  any  of  the  matters  for  which  an  arbitration  is  herein 

provided. 

XIV 

The  authorizations  or  licenses  hereby  granted  may  be  enjoyed 
as  well  by  the  Subway  Company  itself,  as  by  any  lessee,  grantee, 

43 


CONVEYANCE  OR  ASSIGNMENT 


Conveyance, 
assignment.etc. 


Approval  by 
Commission 


Consolidation 
or  merger 


Approval  by 
Commission 


Effect  of 
change  in 
ownership 


assignee,  transferee  or  successor  thereof ;  and  the  Subway  Com- 
pany shall  have  the  right  to  grant,  convey,  assign,  transfer  or 
mortgage  the  authorizations  or  licenses  hereby  granted,  provided, 
however,  that  every  grantee,  assignee,  or  transferee  thereof,  not 
including,  however,  a  mortgagee  or  mere  lienor,  but  including 
any  purchaser  upon  foreclosure  of,  or  under  or  by  virtue  of  any 
provision  of  any  mortgage  or  lien,  shall  be  a  corporation  subject 
to  the  laws  of  the  State  of  New  York,  and  shall  upon  accepting 
the  grant,  transfer,  lease  or  assignment  and  before  such  grant, 
transfer,  lease  or  assignment  shall  be  valid,  assume  and  agree  to 
perform  all  of  the  obligations  which  by  the  provisions  hereof  are 
assumed  by  the  Subway  Company,  and  no  such  grant,  conveyance, 
transfer,  lease  or  assignment  and  no  mortgage  hereafter  made 
covering  the  authorizations  or  licenses  hereby  granted  shall  re- 
lieve the  Subway  Company  of  its  obligations  hereunder  or  be 
valid  unless  the  same  shall  have  been  approved  by  the  Com- 
mission. 

And  provided  further  that,  in  case  the  Subway  Company 
or  any  successor  or  future  owner  of  any  of  the  authorizations  or 
licenses  shall  be  consolidated  with  or  merged  into  any  other 
corporation  the  obligations  of  the  Subway  Company  or  such  suc- 
cessor or  future  owner  hereunder  shall  remain  unaffected  and 
the  authorizations  or  licenses  shall  pass  to  such  new  corporation 
only  if  the  agreement  or  act  of  consolidation  or  merger  (which 
shall  not  be  valid  or  of  any  force  or  effect  unless  the  same  shall 
have  been  approved  by  the  Commission)  shall  effectually  provide 
that  the  new  consolidated  or  merging  corporation  shall  assume 
all  such  obligations,  or  if  such  act  or  agreement  shall  not  so  pro- 
vide, then  if  and  when  such  new  consolidated  or  merging  cor- 
poration shall  in  writing  expressly  assume  such  obligations — it 
being  the  express  intention  of  this  instrument  that  no  change  in 
the  incorporation  of  the  Subway  Company  or  of  any  such  suc- 
cessor or  future  owner  or  in  the  ownership  or  control  of  the 
authorizations  or  licenses  hereby  granted,  or  of  any  of  them  shall 
diminish  or  affect  the  obligations  of  the  holder  of  the  same. 


Award  to  Sub- 
way Company 


XV 

The  Commission  in  view  of  this  certificate  and  in  conjunc- 
tion therewith  has  awarded  or  may  award,  subject  to  the  ap- 
proval of  the  Board  of  Estimate,  to  the  Subway  Company 

(1)  A  certificate  authorizing  additional   tracks  on  the 
Broadway  Line,  Fulton  Street  Line  and  Myrtle  Avenue  Line 


44 


SUBWAY   CONTRACT 

mainly  in  the  Borough  of  Brooklyn,  and  wholly  in  the  City 
of  New  York,  and 

(2)  A  contract  under  or  in  pursuance  of  which  a  rapid 
transit  railroad  may  be  in  part  constructed,  and  may  be 
maintained  and  operated  upon  lines  known  respectively  as 
the  Broadway-Fourth  Avenue  Line,  Fourteenth  Street-East- 
ern Line  and  Culver  Line  as  in  the  said  subway  contract 
described. 

It  is  now  agreed  therefore,  that  if  said  certificate  or  contract 
shall  not  take  effect  or  if  the  said  Subway  Company  shall  be 
released  from  such  certificate,  then  this  certificate  hereby  granted 
shall  become  null  and  void  and  all  rights  given  hereby  to  the 
Subway  Company  shall  cease  and  determine. 


45 


TESTIMONIUM 

IN  WITNESS  WHEREOF,  this  certificate  has  been  prepared  by 
the  Public  Service  Commission  for  the  First  District,  and  is  now 
attested  by  its  seal  and  by  the  signature  of  its  chairman,  who  is 
its  presiding  officer,  and  by  the  signature  of  its  secretary  this 
19th  day  of  March,  1913. 

PUBLIC  SERVICE  COMMISSION  FOR  THE  FIRST  DISTRICT 

By  EDWARD  E.  McCALL 

Chairman 

Attest: 

TRAVIS  H.  WHITNEY 

Secretary 

[Seal  of 
Commission] 


46 


ACKNOWLEDGMENT 

STATE  OF  NEW  YORK,) 
County  of  New  York,j 

On  this  19th  day  of  March,  1913,  in  the  City  of  New  York, 
in  said  county  before  me  personally  appeared  Edward  E.  Mc- 
Call  and  Travis  H.  Whitney,  each  to  me  known  and  known  to 
me  to  be  the  said  Edward  E.  McCall,  the  Chairman,  and  the  said 
Travis  H.  Whitney,  the  Secretary  of  the  Public  Service  Com- 
mission for  the  First  District,  and  the  said  Edward  E.  McCall 
and  Travis  H.  Whitney,  being  by  me  duly  sworn,  did  depose 
and  say,  each  for  himself  and  not  one  for  the  other,  the  said 
Edward  E.  McCall,  that  he  resides  in  the  Borough  of  Manhat- 
tan, in  the  said  City;  that  he  is  the  Chairman  of  the  said  Com- 
mission, and  that  he  subscribed  his  name  to  the  foregoing  certifi- 
cate by  virtue  of  the  authority  thereof;  and  the  said  Travis  H. 
Whitney,  that  he  resides  in  the  Borough  of  Brooklyn,  in  the 
said  City;  that  he  is  the  Secretary  of  the  said  Commission,  and 
that  he  subscribed  his  name  thereto  by  like  authority ;  and  both 
the  said  Edward  E.  McCall  and  Travis  H.  Whitney  that  they 
know  the  seal  of  the  said  Commission  and  that  the  same  was 
affixed  to  the  foregoing  certificate  by  the  authority  of  the  said 
Commission  and  of  a  resolution  duly  adopted  by  the  same. 


[Notarial  HOWARD  A.  BUTLER 

Public  No. 
New  York  County 


Seal]  Notary  Public  No.  186 


47 


ACCEPTANCE 

The  New  York  Municipal  Railway  Corporation  hereby  ac- 
cepts the  foregoing  certificate  and  all  the  terms,  conditions  and 
requirements  thereof. 

Dated,  New  York,  March  19,  1913 

NEW  YORK  MUNICIPAL  RAILWAY  CORPORATION 

By  T.  S.  WILLIAMS 

President 
Attest : 

HARRY  A.  BULLOCK 

Secretary 

[Seal  of 
Corporation] 

Approved  as  to  form 

ANDREW  M.  WILLIAMS 
GEORGE  D.  YEOMANS 


48 


ACKNOWLEDGMENT 

STATE  OF  NEW  YORK, 


County  of  New  York/ 

On  this  19th  day  of  March,  1913,  in  the  City  of  New  York,  in 
said  county,  before  me  personally  appeared  Timothy  S.  Williams 
and  Harry  A.  Bullock,  to  me  known  and  known  to  me  respec- 
tively to  be  the  said  Timothy  S.  Williams,  the  President,  and  the 
said  Harry  A.  Bullock,  the  Secretary,  of  New  York  Municipal 
Railway  Corporation,  and  being  by  me  duly  sworn  they  did  de- 
pose and  say,  each  for  himself  and  not  one  for  the  other,  the 
said  Timothy  S.  Williams  that  he  resides  at  Huntington,  in  the 
State  of  New  York,  and  is  the  President  of  the  New  York 
Municipal  Railway  Corporation,  the  corporation  named  in  and 
which  executed  the  foregoing  acceptance,  and  that  he  subscribed 
his  name  to  the  foregoing  acceptance  by  the  authority  of  the 
Board  of  Directors  thereof ;  and  the  said  Harry  A.  Bullock,  that 
he  resides  in  the  Borough  of  Brooklyn,  New  York  City,  in  the 
State  of  New  York;  that  he  is  Secretary  of  the  said  New  York 
Municipal  Railway  Corporation  and  subscribed  his  name  to  the 
foregoing  acceptance  by  like  authority;  and  both  the  said  Timo- 
thy S.  Williams  and  the  said  Harry  A.  Bullock,  that  they  know 
the  seal  of  the  said  New  York  Municipal  Railway  Corporation; 
that  the  seal  affixed  to  such  acceptance  is  such  seal,  and  that  the 
same  was  affixed  to  the  foregoing  acceptance  by  authority  of  the 
Board  of  Directors  of  the  said  New  York  Municipal  Railway 
Corporation  and  pursuant  to  a  resolution  adopted  by  the  said 
Board. 

[Notarial  HOWARD  A.  BUTLER 

Notary  Public  No.  186 

New  York  County 


49 


INDEX 


Subdi- 

Art.  vision  Page 
ACCOUNTS: 

Books,  etc.,  shall  be  kept VIII  ....  13 

Commission  may  establish  system  of VIII  ....  14 

Alterations  in  methods  of  keeping VIII  ....  14 

Actual  cost  of  plant  and  property,  how  determined IX  ....  16 

ACTUAL  COST: 

Of  plant  and  property,  defined IX  ....  16 

Of  plant  and  structure,  defined IX  ....  19 

Of  equipment,  defined IX  ....  17 

Determination  of,  by  Engineer,  etc IX  ....  21 

ADDITIONAL  TRACKS: 

Defined VI  ....  11 

Readjustment  of  rental  as  to X  ....  33 

ADDITIONS: 

Defined IX  ....  17 

Determination  of  dates  when  put  into  operation IX  ....  22 

Price  Schedule  for  payments  for,  upon  termination  on  notice  XI  ....  37 

How  to  become  property  of  City,  on  expiration  of  term XII  ....  41 

Price  Schedule  of  payments  for,  upon  expiration XII  ....  41 

ADVERTISING: 

Use  of  Railroads  or  Stations  for VII  12 

ARBITRATION: 

Of  expenditures VIII  15 

Of  actual  cost IX  ....  21 

Of  readjustment  of  rentals i X  ....  33 

Of  readjustment  of  compensation X  ....  34 

Of  valuation XI  ....  40 

Manner  of  conducting,  under  this  certificate XIII  ....  42 

BOARD  OF  ESTIMATE: 

Defined... 2 

Approval  by,  of  readjustment  of  rental X  ....  33 

Approval  by,  of  readjustment  of  compensation X  ....  34 

BOOKS: 

Subway  Company  shall  keep VIII  13 

BRIGHTON  BEACH  LINE: 

Described,  as  an  Existing  Railroad 3 

• 

BROADWAY  LINE: 

Described,  as  an  Existing  Railroad 

CANARSIE  LINE: 

Described,  as  an  Existing  Railroad 3 


11 


INDEX 


Subdi- 

Art.  vision  Page 
CITY  OF  NEW  YORK: 

Defined : ....  1 

Dates  when  authorizations  may  be  terminated  by 5 

Termination  of  authorizations  by,  pursuant  to  notice XI  ....  35 

Right  of  inspection  of  Railroads IV  ....  10 

Liability  of  Subway  Company  to,  for  damages V  ....  11 

Payments  of  compensation  to,  when  and  how  made X  ....  32 

Termination  of  Subway  Contract  as  to  Broadway-Fourth 

Avenue  Line  by X  ....  33 

Readjustment  of  rental  and  compensation X  ....    33-34 

Lien  upon  authorizations,  plant,  etc X  ....  34 

COLUMNS: 

Location  of IV  9 

COMMISSION: 

Denned 1 

Execution  of  certificate  by I  ....  6 

Power  to  extend  time  for  beginning  construction  and  opera- 
tion   Ill  8 

Power  to  permit  deviations  from  plans IV  ....  9 

Approval  of  necessary  sidings IV  ....  9 

Approval  of  grade  crossings IV  ....  9 

Plans  and  drawings  to  be  submitted  to IV  ....  8 

Power  to  prescribe  as  to  opening  of  streets,  erection  of  tem- 
porary structures,  etc IV  ....  10 

Right  of  inspection  of  Railroads IV  ....  10 

Supervision  and  inspection  of  all  operations  of  Subway  Com- 
pany   VIII  .....  13 

All  contracts  for  construction  or  equipment  to  be  submitted 

to VIII  13 

Power  to  establish  system  of  accounts VIII  ....  14 

May  object  to  expenditures. VIII  ....  15 

Thorough  inspection  by,  contemplated VIII  ....  16 

Determination  of  actual  cost  of  plant,  structure,  etc IX  ....    19-22 

Power  to  examine  books,  etc.,  of  Subway  Company 

Readjustment  of  compensation  paid  by  Subway  Company. .  X  ....  34 
Methods  of  compelling  performance  of  agreement  by  Subway 

Company X  ....  35 

Power  to  terminate  authorizations,  upon  notice ,  .  XI  ....  35 

Approval  of  mortgage,  etc.,  of  authorizations XIV  ....  44 

Proceedings  in  case  of  merger  or  consolidation XIV  ....  44 

COMMISSIONERS: 

Appointed  by  Appellate  Division,  determination  of,  in  lieu  of 

consent  of  property-owners II  7 

COMPENSATION: 

To  City,  as  affected  by  expenditures VIII  12 

When  not  a  percentage  or  portion  of  income,  earnings  or 

profits VIII  ....  16 

Payment  to  Comptroller X  ....  22 

When  to  be  readjusted X  ....  34 

Readjustment  of,  how  determined X  ....  34 

Lien  of  City,  to  secure  payment  of X  ....  34 

COMPTROLLER: 

Defined 2 

Payments  to,  by  Subway  Company 

Time  and  method  of  payments  to 

Power  to  examine  books,  etc.,  of  Subway  Company X  ....  33 

CONSENTS: 

Of  property-owners,  to  be  obtained  by  Subway  Company..  .  II  ....  G 


INDEX  III 

Subdi- 

Art.     vision  Page 
CONSTRUCTION: 

Of  Railroads,  when  to  begin 7 

Suspension  of,  as  to  third  tracks 

Liability  of  Subway  Company  for  damages  from,  of  Railroad  V        ....  11 

Books  of  Subway  Company  to  show  cost  of VIII  13 

Contracts  for,  to  be  submitted  to  Commission VIII        ....  13 

CONTRACTS: 

Subway,  defined 

For  construction  or  equipment,  to  be  submitted  to  Com- 
mission   VIII        ....  13 

Certain,  not  to  extend  more  than  five  years VIII       14 

COST  OF  PLANT  AND  PROPERTY: 

Actual,  books  shall  be  kept  showing VIII       ....  13 

Actual,  how  determined IX        ....  16 

DAMAGES: 

Liability  of  Subway  Comapny  for V        ....  11 

DEBT  DISCOUNT  AND  EXPENSE: 

Denned IX       ....  17 

As  an  element  in  actual  cost  of  equipment IX             3  18 

As  an  element  in  actual  cost  of  plant  and  structure IX             3  19 

DEFINITIONS: 

Of  Actual  cost  of  equipment IX        ....  17 

Actual  cost  of  plant  and  property IX          ...  1G 

Actual  cost  of  plant  and  structure IX        ....  19 

Addition IX       ....  17 

Additional  Tracks * VI        11 

Board  of  Estimate "     2 

Broadway  Line ~>. 2 

Brighton  Beach  Line 3 

Canarsie  Line 3 

City 1 

Commission 1 

Comptroller 

Debt  Discount  and  Expense IX        ....  17 

Engineer 

Equipment IX        ....  17 

Existing  Railroads 2 

Fifth  Avenue  Line 3 

Fulton  Street  Line 2 

Interest IX             6  18 

Jamaica  Line 4 

Lexington  Avenue  Line 2 

Liberty  Avenue  Line ....        ....  4 

Myrtle  Avenue  Line 2 

New  York 1 

Plant  and  Property IX        ....  16 

Plant  and  Structure IX        17 

Railroads 1 

Rapid  Transit  Act 1 

Sea  Beach  Line 3 

Subway  Company 1 

Subway  Contract 3 

Subway  Railroads *. .  .  .              3 

Superintendence IX             5  18 

Taxes IX             4  18 

DETERMINATION: 

Of  actual  cost IX        16 

Of  commissioners  appointed  by   Appellate   Division   as  to 

necessity  for  route II        ....  7 


IV  INDEX 

Subdi- 

Art.  vision    Page 
ENGINEER: 

Defined 2 

Inspection  by,  contemplated. ./: VIII        16 

Determination  as  to  actual  cost IX  ....          20 

EQUIPMENT: 

Contracts  for,  to  be  submitted  to  Commission VIII  ....          13 

Defined IX        17 

Actual  cost  of,  defined IX        17 

Determination  of  actual  cost  of IX  ....          20 

EXPENDITURES: 

Commission  may  object  to VIII  ....          15 

Arbitration  of,  in  case  of  objections VIII  ....          15 

Not  a  part  of  actual  cost  unless  plans  are  approved,  etc IX  ....          22 

EXPIRATION: 

Of  authorizations,  proceedings  upon XII  ....          40 

EXTENSIONS: 

Readjustment  of  rental  of,  upon  termination  as  to  some  lines  X  ....         33 

FARES: 

Rate  of VI  ....          11 

FULTON  STREET  LINE: 

Described,  as  an  Existing  Railroad 2 


GIRDERS: 

Location  of *. IV       ....           9 

GRADE  CROSSINGS: 

Approval  of  Commission  required IV        ....            9 

INCOME,  EARNINGS  AND  PROFITS: 

Payment  of  Compensation  to  Comptroller  out  of X        ....          22 

INSPECTION: 

Right  of,  by  Commission  and  City IV        ....          10 

Supervision  and,  by  City  and  Commission VIII        ....          13 

Thorough,  contemplated VIII       16 

INTEREST: 

As  an  element  in  actual  cost  of  equipment 6         18 

As  an  element  in  actual  cost  of  plant  and  structure IX             6         20 

JAMAICA  LINE: 

As  the  "  Railroads  " 1 

Three-track  railroad  authorized a           4 

Route  described a           4 

Termination  of  authorizations  as  to,  upon  notice XI        ....          35 

LABOR  AND  MATERIALS: 

As  an  element  in  actual  cost  of  equipment IX             1         17 

As  an  element  in  actual  cost  of  plant  and  structure IX              1          19 

LEXINGTON  AVENUE  LINE: 

Described,  as  an  Existing  Railroad r, . . .  

LIBERTY  AVENUE  LINE: 

As  the  "Railroads" 

Three-track  railroad  authorized b           4 

Route  described b 

Termination  of  authorizations  as  to,  upon  notice XI        ....          35 


INDEX  V 

Subdi- 

Art.  vision  Page 
LIEN: 

Of  City,  upon  authorizations,  plant,  structure,  etc 34 

MAINTENANCE: 

Of  the  Railroads VII  ....  12 

MERGER: 

Proceedings,  in  case  of XIV  ....  44 

MYRTLE  AVENUE  LINE: 

Described,  as  an  Existing  Railroad 

NEWSPAPERS: 

Sale  of,  in  Railroads  and  Stations VII  ....  12 

NEW  YORK  MUNICIPAL  RAILWAY  CORPORATION: 

Defined  as  "Subway  Company" 1 

NOTICE: 

Of  objection  to  determination  of  actual  cost IX  ....  21 

Of  arbitration  of  determination  of  actual  cost IX  ....  21 

Of  readjustment  of  rentals X  ....  33 

Of  termination  of  authorizations XI  ....  35 

Of  proceedings  pursuant  to  arbitration XIII  ....  42 

OPERATION: 

Authorization  of ....  1-2  4 

Date  of  beginning,  how  evidenced 5 

Of  Railroads,  when  to  begin Ill  ....  7 

Liability  of  Subway  Company  for  damages  from,  of  Railroads  V  ....  11 

Shall  be  skilful  and  according  to  highest  standards VII  ....  11 

Contracts  for,  to  be  submitted  to  Commission VIII  ....  13 

PAYMENTS: 

Under  contracts  for  construction  or  equipment VIII  ....  14 

To  Comptroller,  of  compensation X  ....  22 

To  Comptroller,  how  made X  ....  32 

By  City,  upon  termination  on  notice XI  ...  35 

For  plant  and  property,  price  schedule  of,  on  termination 

up9n  notice XI  ....  36 

For  additions,  price  schedule  of,  on  termination  upon  notice  XI  ....  37 

PERMITS: 

For  opening  of  streets,  etc IV  ....  10 

PLANS  AND  DRAWINGS: 

Designated IV  10 

Location  of  columns  and  girders IV  ....  9 

To  be  submitted  to  Commission IV  ....  8 

Expenditures  not  included  in  actual  cost  unless  plans  are 

approved IX  ....  22 

PLANT  AND  PROPERTY: 

Denned IX  16 

Obligation  for  maintenance  of VII  12  • 

Books  shall  be  kept  showing  actual  cost  of VIII  ....  13 

Actual  cost  of,  how  determined IX  ....  16 

Payments  for,  upon  termination XI  ....  35 

Price  Schedule  for  payments  for XI  36 

Determination  of  payments  for XI  40 

To  become  property  of  City,  on  expiration  of  term XII  ....  40 


VI  INDEX 

Subdi- 

Art.      vision    Page 
PLANT  AND  STRUCTURE: 

Defined IX       ....          17 

Actual  cost  of,  defined IX                        19 

Determination  of  actual  cost  of IX                        20 

Lien  of  City  on X                        34 

POWER: 

Electricity  or  compressed  air  to  be  used VII        ....          12 

PROPERTY-OWNERS: 

Consents  of,  to  be  obtained  by  Subway  Company II        ....            6 

RAILROADS: 

Defined i 

Existing,  defined 2 

Subway,  defined ....        ....            3 

Three-track,  over  Jamaica  Line,  authorized 4 

Three-track  over  Liberty  Avenue  Line,  authorized 4 

Consent  of  property-owners  to  construction  of II        6 

When  construction  of,  shall  begin Ill        ....            7 

Plans  and  profiles  of IV        ....            8 

To  follow  the  general  designs  of  the  Van  Cortlandt  Park 

Extension IV        ....            9 

Sidings IV        9 

Grade  Crossings IV        ....            9 

Location  of  columns .  .  IV        ....            9 

Plans  and  drawings  to  be  submitted  to  Commission IV        ....            8 

Damages  to  property  from  construction  or  operation  of V        ....          11 

Rate  of  fare  on VI        ....          11 

Power  to  be  used VII        ....          12 

Passengers  and  property  may  be  transported VII        ....          12 

Shall  not  be  used  for  advertising  purposes  or  for  any  trade 

or  occupation VII        ....          12 

Books  shall  show  cost  of VIII        13 

Actual  cost  of  plant  and  property  of,  how  determined IX        ....          16 

Payment  of  compensation  to  Comptroller X        ....          22 

To  become  property  of  City  on  expiration  of  term XII        ....          40 

RAPID  TRANSIT  ACT: 

Defined 1 

Of  provision  in  respect  to  advertising,  etc.,  if  amended VII        ....          12 

Proceeding  by  City  under  Section  9  of X        ....          35 

Valuation  under  Subdivision  1  of  Section  34 XI        ....          40 

REAL  ESTATE: 

Subway  Company  authorized  to  acquire 5 

Subway  Company  shall  acquire V        ....          11 

As  an  element  in  actual  cost  of  equipment IX             2         18 

As  an  element  in  actual  cost  of  plant  and  structure IX             2         19 

RENTAL: 

Payment  of,  as  compensation X        22 

Adjustment  of,  in  event  Subway  Contract  is  terminated  as 

to  some  Lines. X       ....         33 

REPLACEMENTS: 

As  an  element  in  actual  cost  of  equipment 

As  an  element  in  actual  cost  of  plant  and  structure IX             6         20 

ROUTE: 

Of  Broadway  Line,  described 

Fulton  Street  Line,  described 

Myrtle  Avenue  Line,  described 

Lexington  Avenue  Line,  described 


INDEX  VII 

Suhdi- 

Art.      vision  Page 
ROUTE — Continued: 

Of  Fifth  Avenue  Line,  described 

Brighton  Beach  Line,  described ^, .  3 

Canarsie  Line,  described 3 

Sea  Beach  Line,  described 3 

Jamaica  Line,  described 4 

Liberty  Avenue  Line,  described 4 

SEA  BEACH  LINE: 

Described,  as  an  Existing  Railroad 3 


SIDINGS: 

Maximum  length  of,  prescribed ., TV  ....  9 

STATIONS: 

Use  of,  for  advertising  purposes  or  for  trades  or  occupations  VII  ....  12 

Sale  of  newspapers  in VII  ....  12 

STREETS: 

Authorizations  to  Subway  Company  to  open IV       10 

SUBWAY  COMPANY: 

Defined 1 

Authorized  to  construct,  maintain  and  operate  railroads. ...  .....  1--2  4-5 

Authorized  to  acquire  real  estate ....  3  5 

Authorized  to  transport  persons  and  property ....  4  5 

Authorized  to  construct  and  maintain  wire.?,  cables,  etc ....  5  5 

Authorizations  to  be  for  a  period  of  85  years  subject  to 

earlier  termination / 5 

Acceptance  of  certificate  by I  ....  6 

Permits  for  opening  streets. IV  ....  10 

To  acquire  necessary  real  estate,  etc V  ....  11 

Liability  for  damages V  ....  11 

Care  of  surface  and  subsurface  structures V  ....  11 

Rate  of  fare  chargeable  by VI       11 

Duty  of,  as  to  maintenance  of  plant  and  property VII  ....  12 

May  transport  passengers  and  property VII  ....  12 

Supervision   and  inspection   of  all   operations  of,   by   City 

and  Commission VIII  ....  13 

Shall  keep  proper  books VIII  ....  13 

Duty  to  afford  facilities  for  inspection VIII  ....  16 

Determination  of  actual  cost  of  plant,  structure,  etc IX  ....  20 

Payment  of  compensation  to  Comptroller X  ....  22 

Readjustment   of   compensation   paid   by,    when   and   how 

determined X  ....  34 

Termination  of  authorizations,  upon  notice XI  ....  35 

Right  of  to  mortgage,  etc.,  the  authorizations  granted  by 

this  certificate XIV  ....  44 

Proceedings  in  case  of  merger  or  consolidation XIV       44 

SUBWAY  CONTRACT: 

Denned 3 

Provisions  of,  as  to  rate  of  fare VI       11 

Provisions  of,  as  to  compensation X  ....  22 

Termination  of,  by  City,  as  to  Broadway-Fourth  Avenue 

Line X  ....  33 

SUBWAY  RAILROADS: 

Defined 3 

Rate  of  fare  of  Subway  Company  during  joint  operation  with 

the VI  ....  11 

Termination  of  Subway  Contract  as  to  some  of X  ....  33 


VIII  INDEX 

Subdi- 

Art.  vision  Page 
SUPERINTENDENCE  : 

As  an  element  in  actual  cost  of  equipment IX  5  18 

As  an  element  in  actual  cost  of  plant  and  structure IX  5  20 

SUPERVISION: 

By  City,  of  all  operations  of  Subway  Company VIII  ....  13 

TAXES: 

As  an  element  in  actual  cost  of  equipment IX  4  18 

As  an  element  in  actual  cost  of  plant  and  structure IX  4  19 

TERMINATION: 

Authorizations  to  be  for  a  period  of  85  years  unless  sooner 

terminated 5 

Of  Subway  Contract  as  to  Broadway-Fourth  Avenue  Line  X  ....  33 

Of  authorizations,  upon  notice XI  ....  35 

Payment  by  City  upon XI  ....  35 

Right  of,  upon  notice,  by  whom  exercised XI  ....  40 

Upon  expiration  of  full  term  of  authorizations XII  ....  40 

TIME: 

Period  of  authorizations 5 

For  acceptance  of  certificate  by  Subway  Company I  ....  6 

For  obtaining  consents  of  property-owners II  ....  6 

For  beginning  construction  and  operation  of  Railroads Ill  ....  7 

Power  of  Commission  to  extend,  for  beginning  of  construc- 
tion and  operation Ill  ....  8 

Extension  of,  to  determine  actual  cost IX  ....  21 

Of  payments  to  City X       32 

TRACKS: 

When  construction  shall  be  begun Ill  ....  7 

Third,  suspension  of  construction  of Ill  .... 

Power  of  Commission  as  to  location  of IV       9 

Additional,  defined VI  ....  il 


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